So, you’ve bought a property and you’re waiting for the price to go up? As we know that is the best way of making money in real estate. We cannot predict the future though – we just don’t know when that’s going to happen, we can’t time the market perfectly.
If you ask me right now in the market where I’m in, in Dubai, I’d say we’re close to the bottom, but nobody really knows. Maybe a year from now we might say, “you know what? We were nowhere near close to the bottom” or we could say, “we were close to the bottom and the market has turned.” We must have the fortitude to ride out the storm of our investments and the best way to do this is to rent your properties out.
One of the most important factors of investing is tenant selection
If you choose your tenants incorrectly you may find yourself in a bit of a nightmare. Am I saying that there are some good tenants and there are bad tenants? Absolutely, people are very different from all over the world and so, choosing good tenants means that you have less problems and you have less things to worry about.
It’s little things that make the difference; if something breaks in the property which always happens, a bad tenant might call you up and complain and complain and eventually you go over to the property, and you discover that it’s a simple thing that could have been easily fixed either by the tenant or by another professional. A good tenant on the other hand, would call you and say, “you know what, let me do it for you, I’ll call somebody, I’ll manage it and then I’ll send you the bill or we’ll adjust the rent next month.” I like that, in my eyes that makes for a good tenant.
How do you find a good tenant who’s going to give you an easier ride on your property investor journey?
I have found that the best way to find tenants is to meet them face to face, look them in the eye and sum them up – use your gut feel to figure out if they are good or not. How did I get that gut feel? I made a lot of mistakes – I went through a whole period where I made mistakes, chose bad tenants and then I learned my lesson.
I think a lot of new investors make the mistake of taking the first tenant they get because they’re anxious to rent their property out and not have to pay the mortgage or expenses from their pocket, they need that income coming in, but hold on you’ve got to find a good tenant.
How do you find a good tenant?
It’s all about meeting that person face to face. If you’re lucky and you’ve got an experienced estate agent, they can take some reference checks, but I’ll be honest when I first took my tenants on, I never took reference checks. It was more important to me to meet them in person.
An added benefit of meeting them in person is that you are more than likely to get to see their car. If you can take a sneak peek of what their car is like, I think you would get a very good idea of what your property was going to be like – a dirty, messy car? You can be pretty sure it’s going to be a dirty, messy property.
The right tenant can help increase the value of your property
Don’t be afraid to set up face to face meetings with your potential tenants and get a feel for them yourself, regardless of reference checks. I also think it’s important to treat your tenants as equals; I always give them the benefit of the doubt to such an extent that I don’t call tenants ‘tenants’ I call tenants ‘clients’ because I’m in the business of real estate, I am a supplier of housing and so my client is a tenant; it’s someone who rents the property from me.
I treat my clients well, I give them a good service and I take care of them, and guess what? They take care of my assets which will help them go up in value over time and the person who lives in my asset is in the best position to help make that happen.
Find good tenants, take care in how you choose your tenants, don’t rush into the first person, and your tenants will take care of your property and it’s going to go up in value over time. That’s how you can start to see a return on your property investment.