Whether you’re a first-time landlord or a property-management veteran, success depends upon the commitment to actively manage the rental property.
These three fundamentals form the backbone of property management strategy:
Tenant Screening Leaves Less to Chance
It’s impossible to predict every permutation that a tenancy can take, but it is easy to minimize income loss by eliminating high-risk applicants.
Every rental applicant expects to undergo some level of tenant screening. Consider the message a landlord sends by skipping this process or cutting corners. A tenant is bound to wonder what other rules can be broken without consequence.
Bad tenants openly admit that they look for easygoing or lax landlords. Once they move in, they will push the limits. Tenant screening helps to identify those applicants most likely to pay late, default, or break the tenancy agreement. That leaves less to chance and gives the landlord more control, not to mention peace of mind.
Good Tenants Can Turn Sour
Finding the best tenants will lower a landlord’s risks, but it does not guarantee a trouble-free tenancy.
In one example, the tenants passed their background checks with flying colours. Both worked and had verifiable income. They both had decent credit. The current and previous landlords gave good references.
During the course of this year-long tenancy, however, this couple ran the gamut of lease violations: they brought in extra pets, a boarder, neglected the landscaping, grew illegal marijuana, ignored rodent and insect infestations, and generated two complaints from neighbours.
These tenants paid rent on time every month and made good on the damage caused because they cared about their credit, so tenant screening paid off. But it’s easy to imagine how this could have been worse.
If not properly managed, even good tenants can turn bad. A tenancy agreement that sets out the parameters for the tenancy is a good first step, but it needs to be combined with a policy for routine property inspections to catch rule-breaking early and keep tenants on track.
Landlords Must Act Quickly
When problems arise — and they inevitably do — a landlord must be unequivocal and swift to resolve them. Whether it’s a repair or a complaint, waffling over what to do or ignoring the problem can lead to significant income loss. Be prepared to make a decision and carry it out — quickly!
At the same time, the landlord must act only within their rights. This requires a working knowledge of the tenancy agreement and the local rental regulations, or a relationship with a lawyer or paralegal who can offer guidance.
Delays are systemic. For instance, the Ontario Landlord and Tenant Board has for months warned that a lack of experienced adjudicators is slowing the dispute resolution process. Two Toronto landlords recently reported waiting six months to evict a non-paying renter.
That’s why it’s important to be decisive and, if legal action is necessary, to start the process as early as possible.
Property management is a job and it requires special skills. Landlords must commit to job training. Or, a landlord can bring in an experienced property manager to take on the day-to-day burdens. The alternative — do nothing and give tenants free rein — is a costly mistake.
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).
Click Here to Receive Landlord Credit Reports.
Disclaimer: The information provided in this post is 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.