The process of accepting new applications for a rental property can be overwhelming, not to mention the part about sorting through bad tenants. Avoid these costs and bad tenants using the following five tips and strategies to help any landlord escape disaster before it controls your property.
1. Hiring a professional on-site manager or being a responsible landlord yourself. Having someone on-site or a phone call away will scare off most “bad” tenants. If you’re not going to be available for TLC around the property, then hire the professionals (and by professionals we mean real property management companies, not your friend’s friend who knows something about plumbing). The monthly fees might be more than you are willing to spend right now, but in the long haul this is what’s best for your properties and your future as an investor.
2. Create rules and expectations of tenants. Once a potential tenant looks over specific rules and qualifications to rent your property, they will have a good understanding as to what they can and cannot do. For example, set an agreement on what to expect if a tenant breaks the lease, the smoking policy, if there is a pet policy, noise ordinance (hours), when and how much are late fees, no long-term vacancies, curb appeal expectations, quarterly checkups, etc. Also, make sure to get a few references and verifications from their previous landlords and jobs. Even though these rules might sound ridiculous to some tenants, they will ‘legally’ save you from a disaster later on down the bumpy road.
3. Don’t get weak. There is a story for everything and tenants are known to come up with some great material as to why they might be late on rent or why they can’t pay the deposit up front, but don’t fall for these sob stories. Tenants are well aware the requirements when renting from you and should you show any sign of weakness up front, you will be in for a long 12 month agreement. So stand your ground and be firm with your requirements and expectations. However, if you want to give this particular tenant a chance, have them sign a Report Tenant Pay Habits to keep that tenant accountable for on time rent payments in the future.
4. Do your homework in the market. Configuring the appropriate amount to charge a tenant can be challenging when you first rent out your property. But do your research and compare the number of bedrooms, square footage, amenities, location, etc., with similar homes or apartments in the area. Be careful, setting a price too low might give your property a bad image, however raising the price too high might also scare good tenants away because they know there are similar properties in the area, asking for lower rent.
5. Meet your tenant. Always meet your tenant or have your property manager meet the tenant. The last thing you want is to find out the family of four you thought was renting your home, was actually two families of four with three dogs. Get to know your tenant, make nice with them and for the next twelve months they will likely make nice with your property.
If you are a new landlord frightened to rent your beautifully remodeled home to a bad tenant or an experienced landlord who still can’t predict a good tenant from one, typically ending that relationship with unpaid rent and new floors, then you will want study up on our advice, avoiding bad tenants and bad experiences.