Step 13: Hold It — Landlording Basics

Step 13.1 — The math that decides if a hold works

Start with real rent, then subtract everything: mortgage payment, taxes, insurance, maintenance, capital reserves, vacancy allowance, and management — even if you self-manage today, price management in, because your time is not free and a future manager is a real cost. What remains is cash flow, and it should be positive on honest numbers, not on the version where nothing ever breaks and nobody ever moves. The Rental Cash Flow Calculator linked here runs exactly this stack. Run it before you buy, again before you refinance in Step 12, and once a year after that.

Step 13.2 — Screen tenants lawfully and consistently

Use written criteria applied to every applicant the same way: income, rental history, credit factors your policy states, and references — within federal, state, and local fair-housing law, which prohibits discrimination on protected characteristics and which every landlord must know cold. Consistency protects applicants and you. Document decisions, keep applications and records as the law requires, and never let urgency to fill a vacancy rewrite the criteria for one applicant. A vacant month costs money. A bad placement costs more, in damage, legal process, and your appetite for the whole business.

Step 13.3 — The lease is the operating system

Use a lease that complies with your state's landlord-tenant law — ideally reviewed by a local attorney — covering rent, due dates, late terms as the law allows, maintenance responsibilities, entry notice, occupants, pets, and renewal. Walk the property with the tenant at move-in, photograph condition together, and document everything both sides sign. Most landlord-tenant conflict is expectation conflict wearing a costume; a clear lease plus a documented move-in removes the costume. When the law in your state sets a rule — deposits, notices, habitability — the lease follows the law, never the reverse.

Step 13.4 — Maintain like you plan to own it for decades

Answer maintenance requests fast, fix small problems before they become structural ones, and keep a per-property log of work, dates, and costs. Budget reserves monthly per house so a water heater is a withdrawal, not a crisis. Inspect on the schedule your lease and local law allow, respectfully and with proper notice. Good tenants stay in houses that are cared for, and turnover — cleaning, repairs, vacancy, re-leasing — is the silent expense that decides whether a portfolio's spreadsheet survives its reality.

Step 13.5 — Review the portfolio, not just the property

Once a year, judge each hold as if you were buying it today at its current value: does the return on the equity trapped inside still beat your alternatives? Some houses graduate — sell them and recycle the equity into Step 16's next move. Some are anchors you keep for decades. Either answer is fine when it is chosen with current numbers. Landlording rewards patience and punishes neglect, and the patience has to be active: reviewed, reserved, and documented, year after year.

Do this step now

Do not just read this step — work it. Open the Rental Cash Flow Calculator and run one real or practice property through it, then read the full guide for this step: BRRRR Strategy Explained. Write down what you produced — a number, a list, a decision — in a deal file you will keep. Every later step assumes that artifact exists. If a term on this page is new to you, the glossary defines it with a worked example, and the topic hubs gather everything on the subject in one place. Progress in this business is mostly finished paperwork and honest numbers, repeated until they compound.

How you'll know this step is done

This step is done when you can point to the artifact it produced — a written decision, a worked number, a list, a signed paper, or a log entry — and explain, in plain language, how you got it and what would change it. If you can only say you read about it, the step is not done yet, and moving on anyway is how gaps hide until a live deal finds them at the worst price. It is also done when you know your own weak point inside it: the input you estimated instead of verified, the conversation you are avoiding, the deadline you have not calendared. Name that weak point in your deal file and give it a date. Steps in this path are not school subjects to pass once; they are stations you will revisit on every deal, faster each time, because the artifact from the last deal becomes the template for the next one.