You have been stewing over whether you should add another Montgomery County rental property to your growing portfolio.
And, like all successful landlords, you have done your due diligence and researched all the right things – market trends, going rental rates, amenities, financing options, as well as nearby shopping, dining, and entertainment venues.
There’s just one catch.
The rental property you want to invest in is right next door to your primary residence.
Though being a next-door landlord has many benefits, it has its fair share of drawbacks as well.
Read on to find out what the pros and cons are of living right next door to your Montgomery County tenants, and how to find success in being a next-door landlord.
The Benefits of Being a Next-Door Landlord
1. You Can Create a Stronger Landlord-Tenant Relationship
Living next door to your tenant is often a great way to build a better, and healthier, relationship.
In many cases, tenants have very little to no contact with their landlords.
This means they never get to know the property owner on a personal level.
Having a friendly relationship with your tenants, that still maintains strong boundaries (after all, this is a business you are running), can forge the distance that often exists between landlord and tenant.
As a result, you may be able to win over your tenant, and increase your lease renewal rates because your tenant enjoys being in your company from time-to-time.
2. Quicker Response Times
Property maintenance can be a real pain if you self-manage your rental property, and live far across town.
No one wants to get an after-hours call that a pipe burst and the property is flooding.
However, if you don’t have a property management company on your side to help you out with 24/7 maintenance, an after-hours call is exactly what you will receive.
Living next-door and receiving a midnight call that your rental property is flooding because of a burst pipe is still going to be a pain.
However, it will be a lot easier to pop on over from next door and handle the issue at hand.
The same rings true for minor, non-emergency maintenance requests.
If your tenants have something they need, a quick visit from you next door will be far less strenuous than having to make an out of the way trip from across town.
3. Tenants Will Behave
If your Montgomery County tenant knows that you live right next door to them, chances are they will be on their best behavior at all times.
While we do not suggest you spy on them (this is not recommended for many reasons), tenants tend to behave better when they know their landlord is around.
Also, breaking the lease agreement will be more difficult for tenants to pull off knowing that you may notice this breach at any moment.
In addition, sneaking a pet into the property knowing there is a no-pet policy will be hard to do.
Damaging the property when you can likely easily see it will be nearly impossible.
And, tenants can forget about having constant parties that wake the entire neighborhood, because that neighborhood includes you.
4. Property Abandonment is Less Likely
In tune with better tenant behavior, another benefit to living right next door to your tenants is the fact that property abandonment is not likely to go unnoticed.
One of the biggest issues facing property owners is the non-payment of rent.
This is especially true if a tenant packs their bags in the middle of the night, and simply disappears without a trace.
Recouping lost rent payments, dealing with abandoned personal property, and having to start all over and place new tenants in their rental, are all things property owners hope to avoid at all costs.
If your tenants decide they want to leave your rental without proper notice, they are going to have to be sneaky to get away with it without you noticing.
In fact, if anything suspicious is going on next door, you are probably going to be the first to notice.
Problems Facing Next-Door Landlords
1. Tenant Screening
Just because you will be living next door to your tenant does not mean you can take any additional liberties when it comes to tenant screening.
You must remain consistent in your tenant screening procedures, and take care not to violate the Fair Housing Act.
While it is okay to want to place high-quality tenants in your property, make sure not to treat next-door tenants any differently than you would other prospective tenants for properties across town.
Do not ask unusual questions or discriminate against any protected classes because you want a particular type of tenant living next door.
In order to protect yourself against any claims of discrimination, enlist the help of an experienced Montgomery County property manager to help aid you with the tenant screening and placement process.
2. Boundaries Might Blur
It can be difficult to find the balance between being a friendly neighbor, and maintaining your status as property owner.
While living next door to your tenant, make sure to set clear boundaries from the start.
This means establishing clear and appropriate lines of communication.
For instance, ensure your tenants that you will be available for all questions and concerns, including emergencies, but that knocking on your front door at random times is not allowed.
You want to make sure that you appear as a kind and understanding landlord that is dedicated to providing your tenants the best living experience possible.
However, you also want to make sure tenants understand that you are the boss, that there is a legal lease agreement in place, and that violations of the rules will not be tolerated.
How to Be a Good Next-Door Landlord
Here are a few things you can do to make sure you are a good next-door landlord:
- Remain Professional. Always remember that this is your rental property business and that business comes first. It is okay to be friendly. It is not okay to let your guard down, and let your tenants get away with violating the lease because you are on friendly terms.
- Screen Tenants Thoroughly. Following strict tenant screening procedures, without violating the Fair Housing Act, will ensure that your investment property, and your sanity, remain intact while your tenants live next door to you for the duration of the lease term.
- Understand the Law. As a property owner, it is your duty to understand that tenants have the renter’s “Right of Quiet Enjoyment” while residing in your property. This means your tenants have the right to be left alone and not bothered by you on a regular basis, despite you living right next door. This means you cannot harass them as they go to and from the property, spy on them, access the property illegally, or otherwise violate their rights.
- Be a Good Neighbor. You don’t want your tenants throwing loud parties, trashing the front yard, involving themselves with illegal activity, or bothering other neighbors. The same applies to you. Being a decent neighbor, is something your tenants will expect from you as well.
In the end, there are many reasons why becoming a next-door landlord in Montgomery County is a good idea.
Being able to see your investment property on a consistent basis is bound to lessen some of the typical problems landlords face with problem tenants.
However, it is important to remember that your tenants may initially be uneasy at the thought of living next door to their landlord.
Go out of your way to show tenants you are professional, and want them to enjoy your property. If you can do this, they will be more likely to sign a lease renewal come the end of their lease term.
If you need help managing your next-door rental property, and prefer to not deal with the logistics of collecting rent, hopping over to fix leaky faucets, or enforcing the no-pet rule when your tenant clearly has a large dog in the backyard, contact Bay Management Group to help.
At Bay Management Group, we provide property owners with a whole host of property management services for a low monthly management fee.
Enjoy the benefits of having a qualified property maintenance crew on hand 24/7, and our ability to inspect properties throughout the lease term to ensure adherence to the lease agreement.
In addition, take advantage of our strict rent collection policy that will not require you to run around collecting rent checks.
At Bay Management Group, we make management of your Montgomery County rental property hands-off, allowing you to feel stress-free about your next-door tenants.