Tenants are your customers. Through rent, they pay the underlying expenses that allow you to build equity in your properties. To succeed as an investor, you need to know your customers' needs and match those needs with your housing product. 

When the match is a good one, everyone gets what they need and the relationship works, sometimes for many years and other times for only a few months.

You will discover that there are important demographic differences among tenants, and between tenants and landlords as well. The most obvious differences are economic, with tenants tending to be younger than landlords and having lower earning power. Some differences include attitude toward the property, opinions about ownership of property itself and about capitalism, and even perceptions about how the relationship between landlord and tenant works. By way of example, tenants often are surprised on being informed that landlords have a mortgage payment to make. They tend to see the relationship from their point of view only, meaning that they have to hand over a large chunk of money each month to the landlord¡ªand that's where it ends.

These differences have to be explored. As a landlord, you will become aware of the different types of tenant you will attract for a property. The tenant pool is dictated not only by die amount of rent, but also by the neighborhood and the type of property. Some neighborhoods are characterized by young families with small children, where properties have fenced yards. In such a neighborhood, most properties also tend to be owner-occupied. If you have a rental there, you will probably be able to charge decent rents compared to other neighborhoods. Tenants will tend to be middle management or executive level people recently transferred to your community; they may be looking for a home to buy within 6 to 12 months.

In another neighborhood, the typical property might be multiple unit, larger, with many more rentals than owner-occupied housing. It may be a student neighborhood near a large university, for example, or tenants might be younger families on the low end of the earning scale or single parents on assistance programs. Internal systems plumbing, electrical, heating will tend to be older; yards will not be fenced; and landscaping will be designed for very low maintenance. Rents will be lower as well, with many properties designed for shared rental arrangements.

While these are broad generalizations, they do exist. You should know that different properties receive different levels of rent, attract different kinds of tenants, and have other important attributes. For example, if you have a property near a university and rent primarily to students, you have to expect your tenant to move in June, and a new match of applicants to arrive in September. This does not mean you will have three months of vacancy; but it wilt be more difficult to find tenants in the summer months.

Before buying property, you should define the kind of tenant you believe you would like, and look for properties in the neighborhoods most likely to fit those needs. No specific market is necessarily better or worse in every case; it depends on what kind of emphasis you want in the properties you will buy and hold for several years.

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