While renting your property(s), are you making mistakes that are costing you money? Let’s take a look at three common errors in judgment that landlords make.
1. No Tenant Screening Process
It is essential to your success as a landlord or a property management company, and to the protection of your building to know who is occupying the space. It saves time and money when your renters are reliable. Screening doesn’t reveal everything about potential tenants, but it gives you a snapshot of how they have behaved in the past. Establish a tenant screening process that includes:
• A detailed background check of the tenant’s history regarding paying rent and property damage.
• A completed application form from all tenants 18 years old and over.
• A credit check may help avoid the process of eviction.
• Verification that the tenant’s income is at least three times more than the amount of the rent.
• A criminal background check can help to avoid renting to those with drug, theft, violence or sexual offense histories.
2. Ignoring Your Property
Do not procrastinate. If your tenant notifies you that something is wrong, assess the situation as soon as possible. This immediate action boosts your relationship with your tenants. It also saves you money because a minor problem left unattended becomes a major problem. Other ways to care for your property and save time and expense include:
• Have a list of reliable contractors that you can call.
• Don’t do it yourself. If you are not skilled in the repair work that needs doing, or you don’t have the time, call someone who is qualified and available.
• Don’t allow tenants to do any repairs.
• Establish a maintenance schedule monthly or quarterly for example. A plan could prevent problems or help you discover them early, and allow you to keep track of the condition of your building.
3. Lack of Communication
Always let your tenants know what they can expect from you and what you expect from them. This policy can avoid misunderstandings and hostile situations.
• Contacting your renter via e-mail is helpful because it is less intrusive than multiple phone calls, it doesn’t have time restrictions, and it is documentation of the communication.
• Make sure that all “dos” and “don’ts” are written in the lease. For example, are holes in the walls to hang décor allowed? How many holes and how large?
• Find out two or three months before the lease ends, what the tenant’s plans are regarding continued occupancy. If you intend to increase the rent, let your tenant know this in advance.
Planning ahead can make the landlord-tenant relationship a pleasantly successful experience, and the investment worth having.