Living The Landlord Dream: How To Find And Keep Good Renters.
Owning rental properties can be a lucrative investment venture. As any landlord will tell you, however, finding and retaining quality renters is tough. There are a few things that you, as the landlord, can do to help not only find but keep good tenants. Owning rental properties is a business and your cash flow is dependent upon the premises being occupied. Lengthy vacancies or frequent turnover will cut drastically into your profits.
How to Find Good Tenants
Finding tenants is not necessarily difficult but finding the right ones can be.
- Screening: The best way to screen potential tenants is with an organized and thorough system. Think of what your ideal tenant would look like and be sure your system evaluates for the characteristics you are looking for. Renters should be dependable, responsible, respectful and have a consistent source of income or other financial means to support their financial obligation. Have a checklist and professional application to help ensure you don’t miss, overlook or skip anything. Having a professional application will also set the tone for the landlord-tenant relationship.
- Application: Your application should be thorough but not excessively lengthy. You will be gathering personal information so be prepared and willing to answer any questions a potential tenant may have regarding why you are gathering certain pieces. Generally, applications will ask for a prospect’s fully name, date of birth, current address, contact information, current employer, current monthly income and references. It may also ask for current financial institutions and social security number and include a statement authorizing a credit and reference check if you choose to perform those. While many personal or small rental business don’t always perform a credit check, it is recommended as it will give you insight into how the potential renter manages his money and reveal if he has ever been evicted or had property repossessed.
- Abide by the Georgia Fair Housing Act: The fair housing act states that a landlord may not discriminate or refuse to rent to an individual based on his/her nationality, ancestry, race, religion, disability, family status or sex. This is extended to include discrimination on the basis of a tenant having a guide or service animal, even in properties that would otherwise not accept pets.
- Marketing: There are some great ways to market your property for free. Many people simply place a “For Rent” sign in the front yard and call it a day. While that can be one strategy, don’t be afraid to take it a little further. Place online ads on social media like Facebook and twitter. Advertise in online classifieds like Craigslist. If you own multiple rental properties consider building a website to show current vacancies.
- Pricing: Be sure to know your area well and learn what other, similar properties are renting for. Charging more than average for your neighborhood will turn many potential tenants away, especially if there are no significant differences between your property and the one across the street that charges $100 less a month. On the other hand, rent that is too low can result in an overwhelming number of inquiries, many of which are likely not ideal renters.
- Property showings: When you do walk potential renters through the property make sure it looks it’s best. Renters will judge the quality of a property on first impressions. Good renters will be looking for a well-maintained home. If you’re property looks run down, prospects will get the impression that you are an inattentive landlord. Cleanliness is essential! This applies to appliances as well as walls and carpets. A clean, well maintained property demonstrates good intentions and efficiency on your part.
How to Keep Good Tenants
So, once you’re found the perfect tenant, how do you keep them? The simple answer is: if you want quality renters, you’ve got to be a quality landlord. A tenant may love your property but if they can’t stand you, they’re unlikely to stay.
- Be available and responsive: Good renters expect to be able to easily communicate with their landlord. We all receive countless e-mails and phone calls a day. Make it a point to respond promptly when your tenants ask questions or make requests. Be sure your tenants have updated contact information for you and notify them if you have a scheduled time that you will be unavailable. If you don’t want to hassle with being the one on call all the time, consider hiring a property manager. Property manager charge a fee for this service, typically 10% of the monthly rent, and will handle all phone calls, questions, and maintenance requests.
- Be honest: If you tell your renter that you will do something, follow though. If for some reason you are unable to, open, honest communication about why is vital. For example, if you tell your tenant that you will have a leaky sink fixed by Friday but there is going to be a delay, keep them up-to-date on progress.
- Write a simple lease: your lease needs to include all pertinent information but try to keep it brief. When the lease is signed it’s also a good idea to verbally go through it with your tenant to highlight things that are particularly important to you and make sure there are no miscommunications. Make sure your expectations are clearly stated to avoid future arguments if a policy is not followed properly.
- Maintain the property: This may seem like a no brainer but it means more than simply fixing problems. Stay up-to-date with routine maintenance like pressure washing, updating appliances and servicing things like septic tanks. Don’t wait for you tenant to call you at 9pm on a Saturday night to inform you that the long-outdated stove isn’t working. Outdated and run-down appliances and fixtures should be replaced before they break. Make it clear in your lease what parts of the property will be maintained by the landlord and what parts are the tenant’s responsibility. A well-maintained property will build your tenant’s pride in their home making them more connected and more likely to want to stay.
- Offer renewal incentives: Let your tenants know how much you value them by offering incentives to stay. When it’s time to renew a lease, offer renters discounts such as a free month of utilities or a temporarily lowered monthly rent. You can also offer rewards for renewing like an updated appliance or new flooring. Some rental properties also offer rewards based on a points system. Tenants earn points for things like early or on-time rent payments or referrals. They can then redeem these points for prizes like gift certificates or property upgrades.
- Get them involved in the community: This works best if you have multiple properties in the same area but encouraging tenants to join community activities like cook outs or game night helps them form relationships with neighbors. Being connected to others in the community will make renters less likely to want to move.
- Keep tenants up-to-date on upcoming renewals: Notify tenants 60-90 days before their lease expires. While you may be on top of when a lease is about end, often tenants forget. Give adequate notice and reminders as the time gets closer. You could even consider offering incentives for renewing early or signing a longer lease.
- Notify tenants promptly if you do not intend to renew: If you do not wish to renew a lease for some reason, let tenants know as soon as possible and inform them of why you are unable to renew the lease. You cannot terminate a lease early without just cause, such as a violation of the lease. You are also under no legal obligation to renew a lease at the end of the term. It is courteous, however, to let a tenant know that his lease will not be renewed so that he has adequate time to find other housing.
- Always schedule visits: Most renters are understanding about regular inspections and, in fact, this should be done to keep an eye on the property and stay on top of regular maintenance. Typically, inspections are done once or twice a year. These visits as well as any others should be scheduled with the tenant to be sure it is mutually convenient. Some landlords feel like the property belongs to them and therefore they have a right to enter it at any time. While technically true, good renters will not be happy with a landlord that stops by unannounced and certainly won’t be with one that enters the property when they are not home. A tenant, like any individual, should be entitled to adequate privacy and you can earn respect from tenants by acknowledging their space and schedule. A tenant who work nights, for example, would not look favorably on a landlord who shows up unannounced at two o’clock in the afternoon. Each tenant will have different needs so, get to know your renters and make it clear that their privacy and scheduling needs are a priority to you.
Live by the Golden Rule
Treat others as you would like to be treated. Most individuals have been renters at some point in their life. Try to think about what you would want in a landlord and become that person. Remember what you liked most about places you have rented and the landlords you have had. Try to incorporate these attributes into your rental business. Be willing to take suggestions or criticism from your tenants and learn and grow from these comments. Take it a step further and gather some information from other landlords who seem to have properties rented consistently. Find out what they’re doing right.
If you want to own rental properties but don’t want to be so hands on, there are great property management companies that can handle the day to day supervision of the property and can even help with the marketing and screening processes.
No landlord wants to end up with bad tenants or tenants that have to be evicted. Put forth the effort in the beginning to find the right renter for you and invest the time, energy, and money in retaining renters that prove to be responsible and respectful.