Owning rental properties isn’t as simple or effortless as some are tempted to believe. There are undeniable perks and rewards, usually including a healthy return on investment, there are also numerous challenges and points of friction that are too easy to overlook.
Traditionally, one of the biggest problems landlords’ encounters is the lack of concern the average tenant shows for the property. Whether it’s through simple carelessness or overt disobedience, tenants often leave properties worse than they found them.
This can lead to serious frustration on the owner’s part, not to mention costly repair bills. But it doesn’t have to be this way.
Some landlords have decent luck with tenants … and it’s not the result of chance. They have exercised purpose and strategy in their approach to managing tenants.
It’s hard to get a renter to treat a property as if it were his own. Tenants know they don’t own the premises, so many are less likely to do all the little things an owner typically does to keep various systems functioning properly.
Having acknowledged as much, you can raise your odds of future success by observing some of the following tips.
The best thing you can do is find good tenants in the first place. They’ll not only pay rent on time but also treat the property with respect.
And though almost any tenant can look good on paper, you can exercise practical screening strategies to weed the bad from the good. One of the most effective tactics is to contact past landlords.
In most cities, the landlord community is a fairly cooperative fraternity. Even if you don’t have an existing relationship with a landlord, he or she will likely be willing to speak with you honestly and let you know how a tenant has behaved in the past.
A tenant is going to form opinions of you and your property right away. First impressions are hard to alter, so make sure you get all your ducks in a row before showing the space.
How you care for your property will set a level of expectation in your tenant. If the area is messy and needs work when tenants move in, this will become their standard. If the property is pristine and fully functioning, then you’ve set the bar high.
A security deposit can be a nice tool to create leverage. In order to use it to your advantage, you’ll need to think carefully about the amount and terms.
Some states impose limits on the deposit you can require (typically an amount equal to one to two months’ rent). In Texas, there is no limit at the state level. This gives you some flexibility.
If you see lots of demand and aren’t worried about finding a tenant, you may choose to boost the security deposit as a method of repelling potentially high-risk tenants. A three-month security deposit, for example, will guarantee that only serious renters will apply.
The odds are, they’ll also be much more willing to care for the property when they have that much money tied up.
The lease agreement is one of your best forms of legal protection, should a tenant cause damage to your property. It’s also a resource that empowers you to explain your policies to tenants in clear and concrete terms.
Remember that you need to put everything in writing. It’s better to have a 25-page lease agreement that goes into significant detail than to use a one-page agreement that fails to cover vital issues.
Don’t just hand your lease agreement to tenants and ask them to sign. It’s worthwhile to walk them through each clause and offer them an opportunity to ask questions. If you’re worried they won’t pay attention, offer to buy lunch and review the agreement over food. The expense will more than pay off in good tenant behavior.
If you want renters to respect your property, you need to show them you respect them, too. When they come to you with a request, whether minor or major, respond immediately. This kind of proactive behavior sends the signal that you care about their best interest.
You can’t compel a tenant to keep your property clean when he or she is living on the premises, but you can set up the person for success. If you’re worried that a tenant won’t exert any effort to keep the living spaces tidy, provide basic cleaning supplies during move-in. You may also attach a simple checklist or set of instructions to the refrigerator.
Some landlords walk through the property with a tenant upon move-in but never step foot inside the premises again, until the day the person moves out. This is a huge mistake. In order to avoid major surprises on the back end of a lease, you’d be smart to conduct semi-regular inspections. Every few months is ideal.
Whatever you do, don’t allow tenants to keep pets on your property. No matter how cute or cuddly they may be, pets are destructive. From shedding and chewing to urinating and scratching, dogs, cats, and other animals will hurt your property’s value. Write a no-pet clause into your rental agreement and allow no exceptions.
Managing a rental property takes time. Don’t believe anyone who tells you it’s an utterly passive investment. If you don’t have the time to keep track of tenant activity and protect your investment, hire a property management company that does. It’s well worth the expense.
If you own rental properties in the Houston area, let Green Residential be your go-to property management partner. Whether you have one rental unit downtown or dozens spread across the Greater Houston area, we have the resources to help you stay on top of your investments.
For a free property management analysis, please contact us today!
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