So you have placed your new tenant and you can now relax...right? Or is now the time to really start to worry? Like many things in life the answer lies somewhere between the two extremes. Here are six steps you can take to set the odds in your favor that you will have great tenants.
Ask a tenant to pull out their lease to check on a particular rule. Many of them will say...sure..let me remember where I put that. It's crazy but true. Tenants often have no idea where they can find their lease. So they either have to contact the landlord with questions or they just figure it is easier to do than to ask permission.
Do yourself and your tenant a big favor.
Maybe it seems obvious but a lot of times we tend to want to forgive or let things slide to preserve the cash flow we are expecting from our tenants. Not a good idea. It will come back to haunt you.
Ever hear "give an inch, take a mile"? This is our experience with making exceptions to the lease. A frequent example is late fees. Whatever your late fee policy, be careful about making exceptions. Remember that by enforcing your lease in any area, you are making it very clear to your tenant that their lease and its terms have important meaning. And that you will be following the terms just as you expect them to do so also.
Tell your tenants that you will schedule routine inspections. Have a clause in your lease that tenants need to cooperate with these inspections. Make it clear that you will inspect. The potential will likely be as powerful as an actual inspection occurring.
Just the fact that your tenants expect inspections might yield much better interior care and maintenance. What is your goal with inspections? To keep your property in nice shape. A tenant who is not sure when you will be inspecting will likely strive to keep the home ready at all times. At least you are improving your odds.
Some tenants have never had it explained to them what could happen to their credit and reputation if they fail to follow their lease. Give them a document that explains the eviction process and how it will damage their ability to do simple things. Things like buying a car or more significantly, renting another place to live.
Many tenants don't understand that the landlord can even take them to court for damages. In this additional legal action the landlord can receive a judgment that will cover unpaid rent and damages to the property. Explaining to tenants that you will obtain a damages judgement and then pursue collection in all methods available is powerful. Tell them the methods used including garnishment of wages and liens on bank accounts. This knowledge may positively affect their motivation to keep payments current and the property in good condition.
These four easy steps can assist any landlord in creating good to great relationships with their tenants. The one constant in all of these steps? Communications. Like many things in any business relationship, creating good communication will go a long way toward your success as a property investor.
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