Tips from The Landlord Files

Clinical Assistant Professor Kathryn Eaton, shares her experiences of being a landlord in the Phoenix real estate market. This particular article focuses on how to handle the unexpected with confidence and poise.

By Kathryn K. Eaton  |  Clinical Assistant Professor Marketing

As the housing market slowly recovers, many homeowners find themselves in the position where they want to rent out their homes while they wait for housing prices to improve. Becoming a landlord can seem daunting, but when done right, it can be a financial boon and even a sound investment strategy. In addition to teaching marketing at ASU’s W. P. Carey School of Business, I have been a landlord in the Phoenix area for the last 12 years.

I started out as an inexperienced recent college graduate, without a clue as to the ins and outs of renting out a home. Along the way I’ve built an arsenal of hard-earned tips and tricks to make the landlord experience as painless and profitable as possible. First, I have found that strange things can and will happen with your rental, and you need to be prepared to roll with it.

Bringing along a sense of humor won't hurt, either. Recently, I had a set of tenants moving out of one of my properties. They very generously allowed me to show the home to prospective tenants while they still had possession of the house. With the tenant's permission, I set up all my showings for the same day, in 15-minute increments starting at 4 p.m.

While I was on my way to the house, I received a call from the first set of prospective tenants. When they arrived at the home they discovered that several police cars and officers were already there. By the time I got there, the house looked like an anthill of police. My tenants had failed to inform their teenaged son that I would be coming by with prospective tenants.

It was April 20, and he had decided to bring his friends home after school to celebrate “420” — the unofficial holiday celebrating marijuana — before his parents got home. The police would not allow us to enter the home until the kids were out, so we stood out front for half an hour (while more and more prospective tenants arrived) waiting for them to clear out.

Finally, kids with very long faces lined up on the front porch, and I was allowed to show the home. We stepped over their feet and around police officers to get in, where we were met with that distinctive odor left over from their recreation. I couldn't decide who felt more awkward, my prospective tenants or me, as I frantically reassured them that it is indeed a very good neighborhood.

To add to the confusion, parents began to arrive to collect their offspring. The front yard was quite a scene: parents yelling as they marched their tearful children to their cars, police standing watch over the remaining teens and several groups of prospective tenants waiting for their turn to see the house.

Thankfully, the story ended well, as I received four applications to rent the property that day. Over the next several months I will share what I have learned, such as how to price the rental right, vet tenants, craft the lease agreement, develop good relationships with tenants, get a business license (you will need one), calculate and pay taxes and many other things that I've picked up along the way … including how to stay calm when the unexpected upends your plans.

First published in The Arizona Republic, May 11, 2015