|
|
|
FINDING GOOD TENANTS Some tips that I have learned through GAREIA (Georgia Association of Real Estate Investors Association), John Adams, many books and through the school of "Hard Knocks" may help you to save time and money. 1. Get a "killer lease" (expect to have to pay for it). See John Adams at www.money99.com or from the GAREIA (you'll have to join first). Include such things as: discounts for rent payments received on or before the 1st of the month, $50/month discounts for the tenant to make any repairs that cost less than $50 such as light bulb replacement, batteries in smoke detectors, window blind repairs, etc. 2. Get an "application" and establish an application fee (whatever the property management, lender or credit bureau charges you for checking the prospective tenant's credit). You will weed out the not-so-serious tenants (and those who know they have poor credit) by charging a fee to process their application. Leave a stack of the applications at the property when you are trying to rent it. 3. Avoid trying to find a new tenant while the current tenant is still occupying the property. Many landlords will disagree with my philosophy on this, but I have found that the current tenant's furnishings may be a deterrent to renting the property. Also, you will have to be there every time a prospective tenant wants to see the property. You certainly don't want the current tenant to be the one to show your property--they will not focus on the positive aspects of your property and will not be cooperative. 4. Leave a key hidden (not your only key) near the front door of the property for prospective tenants to show the property to themselves (only if vacant). Tell them that you just can't be there any time soon, but to be absolutely sure that they put the key back and to pick up an application if they are interested. They must return the application with a check for the application fee if they want to rent it. They always return the key, believe it or not. You won't believe the number of people who will make an appointment to see your rental property and then won't show up. Don't waste your time! However, make sure that you have a name and number of anyone that you allow to see the property. 5. Establish a minimum credit score that you will accept and don't waiver from it! If you own more than 4 rental properties, you must comply with the Fair Housing Laws with regard to discrimination. 6. After the tenant's application has been processed and you would like to accept them, meet with them in person either at your rental property or at their current residence (preferred). Have the lease already prepared and make sure to bring an extra copy to give to the tenant. You can tell a lot about how a tenant will treat your property by looking at their current residence or even just the inside of their car. 7. Get a copy of the landlord tenant law, read it and follow it. This is also available from GAREIA. TIPS FOR A SMOOTH RELATIONSHIP WITH YOUR TENANT 1. Never give a tenant your home phone number or home address. Rent a Post Office Box to have all rent payments and correspondence sent to. Establish a voice mail number for tenants to leave messages. With caller id so common now, you may find that you should contact your tenants from a number other than your home or office number. If the tenants have your home or cell phone number, there is nothing to stop them from calling you at 2:00 am when they have been thrown in jail or lost their housekey! 2. Establish a good guy/bad guy routine with your spouse or partner (who may be fictitious). The person who has direct contact with the tenant is the "good guy" and other one is the "bad guy" partner/spouse who won't allow the tenant to put in that "above ground pool" they want. Never agree to accepting rent payments late--cite the lease to your tenant about when they are due, late payment penalties, etc. If you let them pay late one time, they will do it over and over again. Don't mess around with missed payments. Call the tenant and let them know that the eviction process has begun if you don't receive a payment within the grace period allowed by the lease. File the proper documents in your county immediately--don't make it an idle threat! It costs about $50 to file, but it can take months to evict a tenant, so start early. 3. Provide quarterly pest control free of charge to the tenant. Not only will you keep the bugs down to a minimum, but it allows for the pest control professional to walk through the entire property. You can have a discussion with the pest control professional about the condition of the property and any concerns. Remember that if a tenant is busted for drugs in your home, you could lose the home in a drug seizure! 4. By law, you must make an appointment with the tenant before coming into the property. No surprise visits! It is important to do this periodically to check on the condition of the property inside and out. 5. You will have to use your own judgment whether to allow smokers and pets. Many prospective tenants look for homes instead of apartments because of the strict rules about pets and smoking. In any case, limit the number of pets and include in the lease the names, sizes, and breeds of all pets. Also, require a $250 nonrefundable pet deposit (you may have to replace carpet as a result of pets). 6. Consider providing lawn service for your tenants. Most tenants are not very motivated to cut the grass, pull weeds or fertilize. If you provide it, you are sure that it gets done and there will be no complaints from the homeowners association. 7. Review the covenants for the subdivision and make sure that the rules of use are followed. Be sure that the tenant knows the rules of use too. It is best to provide those rules in writing to your tenant. 8. Always paint, clean the house and clean the carpet between tenants. You will have vacancy between tenants, but you will keep your property in better condition and find better tenants when the property is maintained and clean. 9. Get a one year lease at a minimum. It will keep your vacancy and cleaning down to a minimum. The only exception that I allow is for those tenants who are merely renting a house while they are waiting for the construction of a new home. Those tenants typically need about 3 to 6 months. They don't hang anything on the walls, their rent is always on time, they are a better caliber of tenant and they don't usually bother you as much. Be aware that construction delays are common and they may need to stay in the property longer than they thought, but may not know this until the end of their lease. 10. Get and keep a termite bond (a repair bond instead of a retreatment bond, if possible) on the property. Termites can be devastating here in Georgia. 11. The tenant should pay their own utilities. But be aware that if they don't pay the water bill, it can become a lien on the property. You may want to check with the water department before returning any security deposits. You also may want to check with the water department before BUYING a property. 12. Your security deposit should be one month's rent and should not be returned until you have inspected the property after the tenant has vacated but within a month of vacation. When the tenant moves in, have them complete a "MOVE-IN INSPECTION" form to denote any defects they find in the property. Require that they complete and sign that form within 3 days of moving in. When they move out, you can compare that form to the current condition of the property to determine whether to refund the security deposit. Do everything in writing. If you decide not to return a security deposit, put it in writing and explain why. Do not allow the tenant to skip the last month's rent and "take it out of the deposit". You will have nothing to motivate them to leave the property in good condition. 13. If the tenant notifies you of a needed repair, act on it quickly. If you take care of necessary repairs quickly, you will establish a much better relationship with your tenant. 14. Purchase a Home Warranty from American Home Shield (www.americanhomeshield.com) and renew it each year. It will pay for itself! These warranties cover all the built-in appliances, heating/air, electrical, plumbing and many other optional things. A $60 service charge is a small price to pay if the vendor has to replace a furnace! 15. Your tenants are not your friends! This is a business relationship. Treat them accordingly. All information is believed to be accurate, but should be verified with the proper authorities. For more information contact: Joli Tripp |