Talk to any landlord and they’ll have a tenant horror story to tell – myself included! When you get into the rental property business as a new landlord, tenants are one of the most important factors to consider. Not only will they be looking after your property for you, they will also be paying it off and ultimately building your wealth in real estate. Your ability to attract and keep good tenants will determine whether your rental property business will be a success or a failure so it’s important to know the basics.
Writing a detailed advertisement has two purposes. It allows you to describe all of the benefits of your property and is also the first step in describing the type of tenant you are looking for. You can be clear about whether you allow smoking, whether you allow pets, the amount of rent and damage deposit expected and the length of lease term you are looking for. With all of this information available in the ad, you have already narrowed the field to prospective tenants that potentially fit your profile.
Screening is your second line of defense and the most important step in weeding out bad tenants. When a prospective tenant calls me, I have a list of questions that I ask immediately. If their answers to these questions are favorable, I set up a viewing time to see the property. If they are interested in renting from me, I take things to the second and most important step; filling out the Application Form. This signed form is invaluable as it covers their personal information, their employment history, their financial status and their rental history. The form also allows you to call previous landlords, call credit references, call personal references, conduct a credit check and a criminal record check. If a prospective tenant is not willing to sign the Application Form and provide me with access to this information, I do not rent to them.
Screening is an important first step for landlords and it also sets the tone for tenants as well. It portrays you as someone who is organized, diligent and someone who takes their business seriously.
When you have completed your initial screening and decided which tenants will be moving in to your property, the rest of the relationship is up to you. You may have found the best tenants in the world but they won’t stay with you if you don’t live up to being a good landlord. A good landlord/tenant relationship involves many aspects but here are the most important things to remember.Accommodation Inspection Report, getting post dated checks, preparing a Tenant Binder and putting together a Tenant Basket to welcome them to your property.
Throughout the tenancy it is important that you are always available when contacted. If a tenant calls with a request or repair that needs attention, always respond in a timely manner. Keeping your property in good repair let’s the tenant know that you expect the same from them and also gives them a sense of security about where they live. Stopping in at prearranged times gives you peace of mind that the property is being looked after. Giving small gifts at holiday times and lease renewals also goes a long way to making the tenant feel appreciated.
The law of attraction is always at work in every aspect of your life and the landlord/tenant relationship is no different. Be a great landlord and you will attract and keep good tenants!
In this day and age, there is a form to cover every possibility in the rental property business. From pet leases to utility sharing agreements, everyone will agree “it’s best to always get it in writing”. Making sure that all of the rules are clear before a tenant moves in leads to fewer disagreements and a cooperative landlord/tenant relationship. These signed documents can also protect the landlord if a substandard tenant should slip under their radar and take up residence.
If you are just starting out with one rental property, there are 5 essential rental property forms that you should have on hand before you start to look for a tenant.
RENTAL APPLICATION This is the first form that a prospective tenant will fill out for you during the first meeting if they are interested in renting from you. It covers the personal information of all the people that will be living there including their employment history, credit information and rental history. The best part of the application form is that it allows you to do a credit and criminal background check of a prospective tenant.
INSPECTION REPORT This is filled out before the tenant moves anything into your dwelling and again when they are ready to move out before you return their security deposit. There is a checklist for each room and describes the condition of each item on the list. I always back this form up with dated photos of the property and have the tenant sign both.
LEASE AGREEMENT This is the meat and potatoes of all rental property forms. It outlines the rent, security deposit, length of stay and also lays out all the rules and regulations of living in your property. You can start out with a generic form which can be changed and revised to suit your specific needs or you can use one from an experienced landlord. I like this option because it will already be much more specific based on the landlord’s previous experiences and you can still modify it as required.
DEPOSIT AGAINST RENT Once you have done all of your investigating and decided on a great tenant, it’s time to get a deposit to hold the place until move in day. This form is simply a receipt for that amount and also sets out what is still required as far as security deposit and rent before they take possession.
LANDLORD CHECKLIST Owning rental properties is a business and in order to run a successful business, you need to keep yourself organized. I created a landlord checklist that I use for each new tenant moving in to my properties. It reminds me of all the things I need to do including property fix ups, tenant checks and everything from moving in to moving out. I find this tool invaluable as I never miss a thing and it starts my relationship with my tenant out on the right foot.
These forms will get you started in your rental property business and should be considered your “core package” that you use for everyone. Depending on your needs or as your business continues to grow, you can introduce more forms to your repertoire. These might include utility agreements, garage leases, notices to enter the premises or eviction notices.
Evicting a tenant can be a stressful, tedious process if you aren’t sure of the proper steps to take. There are all kinds of situations that can lead to an eviction but the most common one is missed rent payments.
If a rent check is returned to you NSF, meaning that there are non-sufficient funds in the tenant’s bank account, things can go one of two ways. They can go well (the tenant pays you for the missed rent and NSF charge in a timely manner) or not so well (the tenant misses this payment entirely and possibly more rent payments). If things go in the latter direction it is very important to act. The first step is to send them a default notice. If they don’t respond to that by paying you the missed rent, the second step is to start the eviction process.
This is where some landlords make the mistake of using their heart and not their head. You hear all the time that “tenants have all the rights” and “it can take forever to evict a tenant”. More often than not though, a lengthy eviction is a direct result of a landlord not starting the process soon enough. They listen to excuses and promises to pay, all the while paying rental expenses out of their own pocket while these promises continue to be broken. Suddenly they find that weeks or months have passed and they still haven’t taken the steps to formally evict the problem tenant.
Starting the eviction process sooner rather than later is in your own best interest because owning a rental property is a business. If the tenant comes through and pays you and you feel positive about having them stay on, you can cancel the eviction. If they don’t come through, you haven’t spent so much time and out of pocket expense waiting for a resolution, the eviction process is already in motion.
A final note for the kind hearted, and I’ll be honest I am one, is that ultimately bad things can happen to good people. If your tenant has had a good payment history and has hit a bump in the road, hopefully he’ll be able to catch up and set things right. If not you can look at this as a positive learning experience for you to learn the eviction process. Hopefully it will be an experience that you won’t have to repeat again.