Having income producing property is the dream of many people, but being a landlord can be a nightmare unless you are prepared, carefully screen your prospective tenants and ensure a good working relationship with the tenants in place.
If you want to be a happy and successful landlord, the following 3 tips can help you achieve your goals:
1. Put Your Landlord/Tenant Lease in Writing
This may sound very basic but putting the terms of the lease in writing and adding a few particular provisions can help resolve disputes and, if necessary, enable you to evict a problem tenant more expeditiously. Most standard leases will cover most of these terms but be sure that it does include the following:
• The names of all persons living in the unit, the term of the lease, amount of the security deposit, rent, when it is due and how it is paid, and who is responsible for particular repairs.
• The tenant has a duty to notify you of dangerous conditions and may not add certain appliances, perform repairs or modifications without your written permission.
• If there are some conditions that have imperfections, include these in the lease. If you do repair these during the term of the lease, take photos of the repairs and send a letter to the tenant indicating that these conditions have been repaired.
• Include a grace period when the rent becomes overdue and if late fees or fees for returned checks would apply.
• Indicate if pets are allowed, what types, and if a further damage deposit is required.
• If your state permits it, include a provision that automatic notice to evict will apply after a certain date after the time for rent and payment and grace periods have expired.
• Specify how much notice you must give to the tenant before entering to make repairs. It should be at least 24-hours.
• Include any restrictions on tenant conduct such as excessive noise and unlawful activities. You may want to include a provision that if police are called by other residents for violating a restriction more than once over a certain time, that it constitutes a material violation of the lease.
• Disclose to the tenant about the presence of any environmental hazards such as mold or that the tenant may be exposed to toxins in the unit.
• Do not allow sublets unless you give written permission and provide a written sublease agreement.
2. Make Repairs Promptly
Probably the best way to ensure a good relationship with your tenants is to make needed repairs promptly. A broken appliance or some other condition that you would want fixed immediately in your own home should tell you that this is something to attend to quickly. Give the proper notice before you or a service representative comes to the unit and do not enter unless your tenant is home or you have specific permission to enter otherwise.
Do not accuse your tenant of damaging anything unless it is obvious such as a fire from cigarettes or other human error. If there was intentional damage, talk to your tenant about how it happened and what measures can be taken to avoid it from reoccurring. You may want to warn your tenant that the damage costs will be deducted from the damage deposit but you will have to specify this in writing when the tenant does leave.
3. Dispute Resolution
Many disagreements with tenants occur from damage or needed repairs, complaints from residents over late night parties and excessive noise. Most tenants do not want to have to find another residence and you do not want the headache and expense of having to either evict your tenants or to find other suitable renters.
Call your tenants and arrange a meeting to discuss the dispute or the complaints. If there is a police report regarding an incident, obtain a copy and bring it with you when you meet the tenants. In most cases, you and the tenants can come to a mutually acceptable resolution over the repairs to be done or to curtail late night activities. Point out to the tenant that excessive noise can constitute a material breach of the lease and that you have the right to begin eviction proceedings if another incident occurs that is noted in the written lease agreement.
Finally–Be Patient but Secure
There are other things you can do to ensure a long and beneficial relationship while protecting your investment such as obtaining sufficient liability and property insurance. Along with proper screening of your tenants that includes background checks, references and employment security, these 3 tips can alleviate the many headaches that landlords often must handle with tenants.
Above all, be patient and understanding with your tenants and try to accommodate them if the complaints are minor. Tenants do make mistakes but quickly realize that their actions have consequences and will modify their behavior accordingly if you point out the provisions in the lease that apply to their situation and give them a second chance.