Keeping rental properties running smoothly takes planning, and consistency. Common mistakes, like the ones listed here, are likely to fuel problems down the road:
Mistake #1: Not Screening Tenants. Despite the risks, it’s still common to find landlords who trust that their rental applicants are telling the truth. Unfortunately, there are unscrupulous tenants out there who have learned to exploit that trust, and are known to live rent-free for months while the landlordstruggles with the legal system to get the property back.
With today’s low vacancy rates, unqualified applicants are driven to deceive landlords to avoid becoming homeless. There is no way to tell the difference between good and bad applicants without verifying the information they provide and running a tenant background check.
Mistake #2: Applying Stereotypes. The ideal tenant comes in many different forms. Sometimes it’s the stable single mother who wants to live close to her work. It could be the immigrant family eager to put down roots. Maybe it’s a student, or a senior, or a single professional.
It’s not possible — or legal — to pinpoint the personal characteristics for every tenant. Stick with objective criteria, like credit-worthiness and a decent rental history.
Mistake #3: Spending Too Much on Advertising. Free online ads are popular with apartment seekers. For-rent signs often are all it takes. Review your advertising policies to make sure you are not throwing money away on unnecessary duplication.
Track your advertising dollars to see what is working — and eliminate what isn’t. The easiest way to find out is to ask every applicant how they heard about the property.
Mistake #4: Not Spelling Out the Rules. To the extent that the rules, rights and responsibilities are spelled out in the lease agreement, there will be fewer disputes to navigate during the tenancy. Go over key provisions with the tenants when they sign the lease. Provide an easy reference for the rules — like signs, a laminated copy of house rules, or the link to a website where rules are posted.
Mistake #5: Weak Documentation. When it comes to enforcing rental rights, failure or success rests with the details. Be prepared to go up against tenants who will make up stories or twist facts to make you look like the bad person, even though it was the tenant who broke the lease. Keep contemporaneous records of all aspects of tenancies, including notations regarding phone or face-t0-face conversations.
Mistake #6: Losing Control. It’s important to remain in the position of authority during the tenancy. Even the best of tenants will start to take advantage if given too much latitude. Renting is an ongoing process. Stay in touch with tenants, respond to issues as they come up, and enforce the rules you’ve laid out. You don’t have to be a jerk — it’s okay to like your tenants — but don’t try to be friends. Show some tough love.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.