Owning rentals often feels like mountain climbing, slow and steady upward trajectory with plenty of chances for a fall along the way. Here is a list of ways to prepare and make the climb as safe as possible from a Stessa.com blog:
“Tenants are people too. It’s important to keep that in mind when you own investment real estate. But you’ve also got to remember that business is business. Rent is due, but there are also extenuating circumstances that require flexibility on the part of landlords.
Here are 10 tactics to improve your tenant management while still keeping vacancies low and income flowing.
1. Don’t scrimp on the tenant screening
Protect your property by treating all tenants fairly and equally with a written and signed rental application, credit checks, and reference checks. Develop a robust tenant screening application either with physical paper copies or a digital tool such as Google Forms or Typeform.
2. Use a professionally written lease agreement
The more robust your lease agreement is, the more seriously tenants will take it. Make sure the contract is legal in your state, with all of the terms and conditions are written in simple language, and covers key items such as subletting, pets, rent payment terms, and security deposit return. (If you are in Oregon, Ryan recommends using the OHRA forms: https://store.oregonrentalhousing.com)
3. Manage professionally with “tough love”
Always be cordial, courteous, and professional when dealing with tenants. Maintain normal business hours and a system for getting in touch for after-hours emergencies. Be on guard for tenants who try to ‘work the system’ and strictly enforce requirements in the lease.
That said, tenants may provide proof of financial hardship that warrant such considerations as rent deferment or a rental payment agreement that accounts for a month or two of reduced rent amounts.
4. Make it easy for the tenant to pay their rent
Rent payment options can include online rent payments, smartphone apps, and direct debit from the tenant’s bank account. Offering multiple choices for paying the rent helps avoid the age-old excuse of “the check is in the mail.”
Making this process as frictionless as possible with automated withdrawals (ACH), online payment options, and automated reminders all serve to improve the tenant-landlord relationship. (Ryan recommends considering a free rental management application like Cozy – https://cozy.co/features-benefits/)
5. Keep the good tenants you’ve worked so hard to find
There’s a saying in the rental real estate business that, “Tenants are like gold.” It costs more to replace a good tenant that you might spend on rent incentives. Items like a lease renewal bonus or annual cleaning service go a long way to keeping occupancy levels high.
Even small things like remembering birthdays, or quickly addressing issues that need maintenance or fixing all go a long way to improving your current relationship with good tenants.
6. Renters insurance is a must-have tenant requirement
Require the tenant to obtain insurance that protects them if their property is lost, stolen, or damaged. In addition to protecting you from liability, it also eliminates the tenant excuse of not paying the rent because they need new furniture.
7. Follow the Golden Rule
Treat your tenants as you want to be treated, and the odds are they’ll do the same with you. This includes respecting their privacy and giving the legal notice required before entering their place.
8. Maintain rents at market
Have a system in place to regularly monitor fair market rents. Give the tenant a heads-up and explain why a rent increase is planned, making sure not to violate the landlord-tenant laws in your city and state.
Rent increases are allowed at a certain amount each year, typically at an amount tied to inflation. Ensure you keep these increases going, and inform tenants well in advance of such increases.
9. Cut your losses with a bad tenant
The odds are that if you give a bad tenant one “break” one time, 99.99% of the time they’ll make excuses again, and again, and again. Every now and then, despite your best efforts, you’ll end up with a bad tenant. Enforce your lease, admit your mistake, and look for a good tenant ASAP.
10. Evict swiftly and legally
The fact is that the longer you wait to evict the more damage a bad tenant will do. Then, you’ll have to chase after them for damages. Most cities have attorneys who specialize in residential evictions for a low affordable fee. They know the law and will help protect you from frivolous lawsuits.” (Ryan recommends reading this attorney’s take on Oregon’s executive order evictions during COVID-19 if starting the eviction process in 2020: https://oregonrentalhousing.com/news/8904265)
This is a partial summary of a blog post by Brad Cartier from Stessa.com titled “Managing tenants effectively in uncertain and recessionary times.” For the full version, please click here.