Articles : Safeguarding your Rental Property from your Tenants, while Still Cashing In

Being a landlord is a complex job. Not only do you have to deal with a whole plethora of issues, but some of these issues may have been caused by your tenants, and you must, as well deal with them in a diplomatic manner. We suggest 4 basic steps to help you avoid potential problems with your tenants.

Step 1: Safeguard your Rental Property – Your property is your cash cow, so you must treat it as such, and take advantage of the many available options when making decisions that affect you cash cow. Please refer to the following examples:

a. Smoke detectors – Your tenant is cooking dinner, and the smoke detector starts going off because dinner is burning. The tenant then removes the smoke detector from the ceiling or wall, or simply removes the battery. Many times, the tenant never quite makes it back to reinstalling the smoke detector or batteries. What happens then if there is a fire? As a landlord, you must address these issues before they occur. Choose your options wisely. When purchasing a smoke detector for your rental property, do not choose the cheapest one. Choose one that is tamper proof. The tenant will not be able to take it down or remove the battery, and the batteries last for 10 years.

b. Move-outs – Your tenants are getting ready to move out, and they have been great tenants, so when they tell you not to worry, they will leave the place in clean, and ready to go for the next tenant, you believe them. Then you come in for your final walkthrough and there are dents and dings in the wall from furniture; peeling paint from posters hung with tape; a child’s doodles on the bedroom wall. Again, choose your options wisely. When selecting paint, eggshell is the preferred finish. It has a slight gloss to it, and is washable, and much more resistant to use than flat paint. The slight gloss also helps to cover up any small dings in the wall.

c. Carpeting – Pets and children can be a carpet’s worst enemy. Between the pet hair, and mishaps, and children’s spills, carpets can easily become stained and tattered looking. Be sure to choose a dark colored carpet, or a carpet with a pattern. These carpets withstand heavy use better than others, as they are less likely to show stains. Such carpeting may cost more to purchase and install, but due to its longer life expectancy, you will save money in the long run.

d. Bugs, Pests and Rodents – Everybody hates dealing with bugs, pests and rodents, and the first thought is to call an exterminator. However, exterminators cannot necessarily guarantee that the issue will not return, and are generally very expensive. Why not try to correct the problem yourself first? There are many excellent options out there, such as Maxforce bait, Maki pellets, and Catchmaster glue traps. These are all sufficient, and affordable options.

e. Lighting – A tenant moves out, and you, again, do your final walkthrough, and notice that many of the lights are not working. Do not panic call an electrician. First, check each light with a new light bulb. Many tenants will not replace burnt out bulbs prior to a move out.

f. Tiles – You are renovating your rental property, and want to find cheap tile to use, so you go comparison shopping, and find a great price on some 12x12 tiles. Make sure to consider the cost of installation, and how that factors into your bargain price. After consideration, make sure that you choose a resilient ceramic or vinyl.

Step 2: Choosing a Tenant – Landlords must screen their potential tenants. This process should be organized using a Phone Screening Form. The form should log the inquiries you receive, and should list important questions for you to ask each potential tenant, such as their possible move-in date, how many occupants there will be in the property, or if they have any pets. The form should also log the applicants complete contract information, such as their cell phone number. You should also give the applicant your cell phone number upon making an appointment for him to see the property in case he gets lost or something comes up. Be sure to confirm the appointment with the applicant on the scheduled day so that you aren’t stuck waiting for them if they have had a change of plans, or have simply forgot about the appointment.

Landlords must be cautious when choosing the occupant for their rental property. As described above, this is your cash cow, so you must be sure that the person you are handing the keys over to is someone responsible and trustworthy. Finding such a person can help avoid many potential issues.

Another important part of the screening process is the rental application. Landlords must be sure to have a good rental application. The application should include the following:

a. Credit check – you can either have this performed by a third party company, or you can have the potential occupant run his own credit report for you.

b. Employment verification – you should confirm the potential applicants employment by calling his current, and possibly even previous, employers. You may also want to ask to see a copy of their current pay stub or W2. Be sure to look at the net income, and not just the gross income.

You may even want to think of an excuse to “drop by some paperwork” at your applicants current residence so that you can get a feel for their living style (if their home is in order, or if it is a complete mess).

Step 3: The Lease Agreement – The lease agreement is the key to a landlord’s success in safeguarding his property. It must be specific, and detailed, outlining all of the essentials. Your lease agreement should include the following imperative information:

a. Rental term

b. Amount of rent, due date, and submission method (make sure the first month’s rent is collected before you turn over the keys)

c. Rental late fee

d. Security deposit (make sure this is collected before you turn over the keys as well)

e. Maintenance information

f. Consequences to broken lease terms

g. Lead based paint brochure and disclosure (if your property was built prior to 1978)

h. Utility information (make sure the tenant has the utilities put in his name)

The tenant should initial by each of the above, and any other important sections of the lease. Finally, once the lease agreement has been signed, make 2 copies so that both you and the tenant have one for your records.

Step 4: Eviction – A landlord must always be prepared for the worst case scenario, such as eviction. If your tenant negligently or purposefully damages the rental property, or is delinquent in rental payments, eviction may be necessary.

The following are some suggestions to consider:

a. Use an attorney that specializes in such property management issues as eviction – you should not try to interpret the law on your own.

b. Make a plan of action regarding the notices and correspondence you will be sending to the tenant, and then keep a journal of the delinquency notices, eviction notices, and other paperwork you have sent to the tenant.

c. Keep a rent ledger to record payments, late fees, damages, and any other monies collected from the tenant.

d. Do not wait until the last minute to evict. Remember, the original point, the rental property is your cash cow.