A Landlord’s Guide To Tackling Tenant Troubles

contractAs much as you try not to take in any hugely irresponsible tenants into your property, it’s unlikely that your tenants will always be a breeze to manage.

Even if you try to take extra care to screen potential tenants before locking them into a lease, you never really know who you’re inviting into your property, and problems are bound to arise from time to time.

As a housing manager, you won’t always have a smooth time managing your tenants–here’s how to navigate four common tenant-landlord issues as they arise (and how to prevent them from becoming issues in the first place).

Tenant Issue #1: Your tenants are destroying your house.

Solution: If your tenants are literally destroying your house (scratching up the walls, clogging up sinks and bathtubs, recklessly closing blinds so they fall out, etc.) you’ll surely need to intervene. There’s no question about it–you own the property in which your tenants live, therefore those tenants need to respect the space they’re paying to use.

To prevent a bunch of stress over property maltreatment, have your new tenants give a security deposit before they move in. A security deposit acts as protection which covers “removal of abandoned personal property and any damages that are not normal wear and tear” and acts as a safety net in case something in your property needs significant repairs.

Landlord contents insurance is also a good idea if you’re renting your place out fully or partially furnished, as it ensures that your furniture is covered if lost or damaged in any way.

Tenant Issue #2: Your tenants are disobeying your rules.

Solution: Take pet ownership, for example. Many tenants establish a no-pets rule in order to minimize the chance of damages occurring to their property, among other reasons, and you may have explained this to your tenants from the start. However, some tenants might try tosneak a pet into the property and take extra care to hide the fact that they’ve got an animal.

It’s pretty easy to tell if your tenants are disobeying the no-pets rule–is there a litter box in the property? Do you think you saw a few chew toys when you came over to collect the rent? If so, confront your tenants and let them know they need to either house their animal elsewhere, or work out some type of agreement with you about conditions that must be met in order for the pet to stay.

Many landlords are flexible enough that if their tenants demonstrate they can keep their pets under control, the rule can bend/adjust for them–however, a tenant who tries to hide anything from their landlord may be one to watch out for.

Tenant Issue #3: Tenants are getting into shady activity.

Solution: Does it seem like your tenants are low-key running a weed distribution site out of your home, or engaging in some other type of illegal activity involving your property? There are numerous telltale signs that let you know your tenants might be into some questionable practices or weird business that could warrant an investigation.

If you suddenly see a lot of cars parked on the street that aren’t normally there outside your property, or if you observe a lot of people entering and leaving your property on a frequent basis for brief amounts of time, you may be right to wonder if your tenants are up to anything illegal (for example, drug dealing).

Be on the lookout for unusual objects or paraphernalia lying around in your interactions with tenants, and if suspicious activity continues, confront your tenants about it. The last thing you want is for sketchy activity to escalate so much that city police intervene and get you in trouble before you had the chance to address the situation.

Tenant Issue #4: Tenants are inconsistent with paying their rent.

Solution: Credit checks can be a good idea at times when assessing the financial stability of a potential tenant, but if you’ve got a current tenant who’s been having trouble paying the rent on time, communicate with them about what’s going on.

It’s always a good idea to understand that your tenants are human and may be going through a hard time (such as unexpected loss of employment or a family emergency), so have a conversation with them to find out what is keeping them from paying rent on time.

Many landlords are a lot more understanding than others about rent issues, and many are successful in working out a rent agreement that works with their tenants (such as adjusting the payment schedule) so before writing your tenants off as chronically unreliable, try to work with them to negotiate a system for paying rent including how much and when it can/should be paid.

While managing tenants can be challenging, housing managers should remember that there’s usually a reason for a tenant’s irresponsibility–stand your ground, but also be real with your tenants and get to know them well enough to be able to comfortably communicate about housing policies and protocols.

Source: rent.uloop.com

How to Write a Great Lease When Self Managing

Author’s Note: I am nothing other than an experienced-aka-jaded landlord. I am not a lawyer or anything certified. This is not legal advice. Always check your state and local laws as regulations can differ.

As a landlord of 7 single family homes, soon to be 8, the lease is my bible. It is my key to success and the reason why I can self manage my houses anywhere. I have signed leases on a ferry between Finland and Russia in the Baltic sea. I have managed a Break Lease Fee on my last day in Abu Dhabi and through the trip back. I have handled countless repairs and other issues all over the US and through every Murphy’s Law moment that exists.

The reason for my success has been my lease. As the pillar of my single family rental success, I even wrote an entire book with my 37 addenda to help others write a great lease. It is sizable and able to scale up from a single family bible to a multi family lease bible too!

Below are the 37 Addendum that I include in my lease:

  1. Appliances included with the Rental
  2. Month to Month
  3. Direct Deposit
  4. Late Fees
  5. Pet Fees14588889_s
  6. Utilities
  7. Assignment and Subletting
  8. No Smoking
  9. Maintenance
  10. Entry By Landlord
  11. Extended Absence By Tenant
  12. Termination on Sale of Premises
  13. Lease Termination Provision for Military Personnel
  14. Tenant Assumes Responsibility for Maintenance
  15. Battery Operated Device(s)
  16. Filters
  17. Steam Cleaning Carpets
  18. Professional Cleaning
  19. Landscaping
  20. HOA
  21. Keys, Garages/Gateshands with house and keys
  22. Damages
  23. Renter’s Insurance
  24. Break Lease Option (Buy Out)
  25. Alterations
  26. Pest Control
  27. Home Businesses
  28. Attic Storage
  29. Renting Site Unseen
  30. Appliance Maintenance
  31. Fees/Violations
  32. Duct Cleaning
  33. Plumbing
  34. Changing Locks
  35. Play Structures, Trampoline, Pools and Other Large Outdoor Equipment
  36. Roommate
  37. As-Is Appliances

The key to my addendums for single family homes has been to create a clear and concise rulebook. The same will be my goal for multi-family homes. You will need to edit/add/delete if your units are laid out as apartments or townhomes. I have learned the hard way if an issue comes up and it is not covered in your lease, then you are SOL unless it is covered by local, state, or federal law.

When scaling up my single family leases I plan on creating addendums to address these additional issues that would come with a multi-family home:

  • Noise – I will establish a quiet hour with expectations and a financial penalty if not followed.
  • Parking – I will address parking and expectations regarding guest parking.
  • Trash – I will address where trash is to be placed.
  • Laundry – If there is a common laundry I would address rules and regulations on use and financial penalties for misuse.
  • Pets – Importance of cleaning up after them with a fine if residents don’t immediately clean up. This too would have a fine.
  • Use – If I paid water, trash or if the location had prized parking, etc., I would be ultra strict on who can use the premises. The last thing you want is all of your tenant’s friends/family bring over their laundry to wash it at your house or have randoms using your dumpsters.

3 Lease Tips

  1. Always have a fine: I have learned the hard way so I impose a fine in my lease when it is legal. It is important to follow your local and federal laws here but imposing fines allows direct punishment. Otherwise, our only option is to evict! Eviction is a costly, sometimes lengthy process and who knows if the tenants will continue to pay rent once notice to evict has been served. On the other hand, If you have a fine, you can charge them money and still let them stay in the home.
  2. Always Review the Lease with Your Tenants: The point of my bible is to have an operating agreement where each side, both the tenant and the landlord, agree. Therefore, I review it in detail. I set aside an hour to go over everything with tenants.
  3. Leave the Lease Blank: My lease is blank. I have my tenants fill in a blank lease. This way their handwriting is throughout the entire lease. It allows there to be no misunderstandings or later– “I didn’t know that…”

Being a property manager has its up and down moments. For me the goal is to maximize my financial benefit while making real estate as passive as possible. That is possible through a strict all encompassing lease. It prevents the “Can we talk about x?” It is right there in the tenant’s own handwriting.

Don’t forget the KEY!!! This is the golden ticket:

YOU MUST HOLD THEIR FEET TO THE FIRE

It doesn’t matter how great a lease is if you do not enforce it and hold their feet to the fire. I always follow my lease and it makes things much easier. The only times I have had regrettable consequences were the times were I did not follow my lease to the fullest extent.

ElizabethBio: Elizabeth is an entrepreneur who is turning her love of rental properties into a work-from-home positions that she self manages anywhere in the world. Follow her at Reluctant Landlord. Looking for a jump start to writing your perfect lease? Check out her book, The Everything Lease Addendum: How To for Landlords. It includes all 37 addenda with wordings and the explanations. Elizabeth hopes her passion for turning her ulcer inducing moments into a solid lease helps you learn these lessons vicariously and not through the trials and pains she experienced.