Here are a few ideas for managing your rental properties... for my present and future clients.
I've been managing my own properties for over 30 years and I continue to learn everyday about new laws, new scams, new demographics and new techniques to better handle and foresee potential problems....here are some basics:
First of all, your property must be clean and well maintained. I didn’t think this needed to be said, but after hearing prospective tenants ooh and ahh over how clean my properties were, I realized that just having a clean property gave me an edge of at least half of my competition.
Tenant Screening Tips
I screen my own tenants. I tend to think that I'm a good judge of character. I've been wrong a couple of times, usually because I don't listen to my own instincts or take my own advice. These tips may help if you manage your own properties.
-In your initial phone interview, be sure to ask "why" they are moving. If they fumble, stumble or complain about their current landlord, this may be a red flag.
-When you take their application, tell them you will be checking all references, employment history and credit history...ask them if there will be any problems with that. Listen and don't interrupt them. Silence is a powerful thing, use it.
-When you take an application from a prospective tenant ask to see their drivers license. Make sure the picture is the same person and that the address listed on the license is the same one they wrote on the application. Professional BAD TENANTS have other people rent for them.
-An anxious tenant needing an apartment NOW is a big RED FLAG. My experience is that tenants needing a place immediately either has recently been evicted or has some personal problems that will only get worse.
-Personally meet everyone that will be occupying the property. Make no exceptions.
- ALWAYS call the people listed as their previous landlords. Before you tell the person you call who you are, ask the following question: "Do you have any apartments for rent"? If the person IS a landlord– his usual answer will be either "I don’t have any apartments right now" or "Yes– I do have an apartment for rent" If the person listed as the alleged landlord doesn’t respond in this way, then they are probably NOT the landlord, but most likely a friend or relative.
When you "set the tone" up front from the first meeting, tenants will determine whether you are a professional landlord or professional pushover.
"It's in the Contract"...Tips
-It's your property. You set the rules! Attach a list of your rules to the lease agreement and have the tenant initial a copy for your files. This will be invaluable if you end up in small claims court.
-Don't be afraid to enforce the lease agreement. You can use a "Notice to comply with lease agreement" form to put your tenants on notice.
-All adults on the lease are responsible jointly and separately for the rent. If one roommate moves out or loses income, the remaining tenant will be responsible. I clearly explain the consequences and add this to an addendum as part of the lease agreement. This is especially important with the boyfriend/girlfriend situation.
-Your lease agreement should state HOW MANY people will be occupying the unit.
- Customize the Lease
You can get a standard lease forms online or at any office supply store. This will cover basic things like rent, security deposit costs and tenant rights. Use these basic documents as the framework for your own lease. Add in any special rules you have for the property, such as a weight limit on pets. Use as much detail as possible and include everything from late payment fees to maintenance responsibility and tenant’s behavior. A clear cut lease will reduce friction between you and your tenant in the future.
A quality property will get you quality tenants. Set up a yearly review and don't wait too long before you get around to fixing things. The most obvious are paint, roof and visual appearance of the property. Stay on top of repairs and maintenance so you don't alienate good tenants. Maintaining your property now will also make it easier for you when you sell it in the future. Handle your income producing property as if it were a business...because it is.
-Conduct a yearly walkthrough of all units. I notify my tenants that I will be conducting a quick walk through of their unit. I can tell you some real scary stories I've witnessed myself!
-Lawn and shrubs well maintained? Can you make improvements?
-Does the parking area need resurfacing?
-Broken-down cars sitting around?
-Gutters and downspouts in good condition?
-Garbage and debris out of sight?
-Improvements? Buildings get higher rents if they are updated.
Water Saving Tips
-Replace shower heads with low volume 2-gallon-per-minute shower heads.
-Prohibit car washing at your site.
-Remove outdoor water spigot handles.
-Set up coin operated washers and dryers in a community laundry area.
-Limit water usage by using specific language in your lease.
-Back in 1997 I received a water bill for a Duplex I own in Bellevue. It was over $600.00!! I spoke with the tenants about it and learned that the tenants had moved in their 6 friends. There were 9 people living in the unit! Their lease agreement stated that no more than 3 people will occupy their unit. I quickly remedied the situation by having them pay the major portion of the bill...then terminated the lease. The city of Bellevue was willing to adjust the bill because it was extremely high.
A water bill is a good indication of how many people are occupying a rental property. If a water bill increases for no particular reason , you need to check on why it has increased. It may be something as simple as a leaking toilet that the tenants haven't fixed or notified you about.
Section 8 Government program
My personal thoughts on government Section 8 subsidized housing? Just say NO
Click here to request information on how to start you own "Landlord Survival Kit"
I've picked up several tips along the way to help determine a good tenant from a bad tenant. My decades of selling apartment units, along with experience in managing my own rental properties give me the expertise to help you in your purchasing or selling a rental property. Contact me if you are interested in buying or selling investment property-Fred Grunewald
...and more tips
Copyright 2021 FRED GRUNEWALD