BiggerPockets

Tenants - Part II

Monday, June 29

Part II of III in choosing and managing tenants:

When tenants move into the properties, have them sign a damage disclaimer in addition to the lease.  The disclaimer says, “you and your guests are responsible for the damages you cause.”  Discuss this with a local attorney for help creating this simple document.

Advertise a program that rewards good tenants to attract them.  The program states that if they stay in your property two or three years, pay the rent on time, and don’t do any damage, you’ll give them an incentive like a cash bonus of say $200.  Or you might offer to do an improvement on the property like clean the carpets, add a new ceiling fan, etc.  Let the tenant pick form a list that you provide.

When tenants say they are moving ask them why?  Sometimes you may find that they’re unhappy with something about the house.  It may be an easy fix, so find out what it is and take care of it if it is resonable to do so.  The cost will more then likely be much lower then the cost of an empty unit while you make the property ready and market for the next tenant.  Maybe it’s a neighbor issue.  If so encourage them to solve it by contacting the neighbor or the local authority that can help resolve it.  Many times helping them solve their issue may keep them as tenants and save you money. 

Other then trying fix any problems that could be causing your tenant to move, also outline all the expenses and hassle they will incur in moving.  Costs include packing supplies, the hassle of packing, moving and unpacking, new utility deposits, new rental deposit, moving truck, loss of work, etc.  Add up the total potential cost and send it to them.  They may reconsider the move.

Usually the most serious complaint tenants have about landlords is that the landlord doesn’t make repairs, or if they do it’s not in a timely fashion.  To help get tenants and have an edge in the rental market, offer a 3 to 5 day repair guarantee.  Use this repair guarantee as part of your marketing.  When the tenant moves in, give them the written guarantee signed by you.  The guarantee says that if the tenant calls about a repair and we’re responsible for it, we’ll fix it within 3 to 5 days or we’ll give them their daily rent back in cash for every day it’s not fixed.

Stay tuned for part III of this topic on tenants.

William Barnard is Managing Partner of Nationwide Property Investments, LLC and President of Barnard Enterprises, Inc. Will participates in millions of dollars in real estate transactions each year and has experience in nearly every aspect of real estate investing, including rehab flips. Join his FREE Membership at www.nationwidepropertyinvestments,com and start or continue on your journey to creating wealth through real estate!

Comments

1. 

   Charles Perkins Reply
   over 1 year ago

   Thanks Will for some sound advice on contract issues. As a landlord it is very important to review your rental agreements regularly. Laws change and new precedents can change how old laws are applied.

2. 

   Dale Osborn Reply
   over 1 year ago

   It is a great idea to review your leases annually so you can keep them current.

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