This Landlord Does It Right

by Chris on April 30, 2012

by Marv Steier

Recently, we received these comments from a TVS Member:

“Mr. Steier, I’m a landlord of residential and commercial property that are investment properties.

I subscribed to your site about 6 years ago and refer to it often. I find the site to be most informative and learn something each time I read an article written by you or Chris.

I use all TVS forms and do all the recommended credit and background checks. I do believe that because of following your advice, I have never received a late payment nor have I received an insufficient funds cheque. You are correct — Screen, Screen and Screen some more.

Our properties (in my case anyway) did not come cheap nor handed to me, thus we must have good honest and respectable tenants.

But to all you landlords out there…I jump for my tenants, after all it is still my property and I want it well maintained for obvious reasons.

You treat others the way you would want to be treated, after all if your tenant is doing all that is required of him or her and in my case they do more, why would you not want to keep them happy?  Often they choose to extend their lease for another 2, 3, or sometimes even 5 years. This is a win-win situation.

Besides, wouldn’t you be ashamed if you were referred to as a scumlord?

Thanks for your articles. They are paying off for me!”

Benefits of Effectively Managing a Rental Business

I want to point out the importance and the benefits of effectively managing your rental business, and having a system in place to do that. This is as a result of the comments noted above on the TVS Blog from a valued TVS member,  and we appreciate her for it. 

Taking the time to set up an effective tenant screening system will reduce income loss, save time, stress, and hassles that high risk tenants bring with them, and create peace of mind knowing you are a great landlord with a successful business.

So let’s analyze why this landlord is successful at getting good tenants, why she is a happy landlord and why she has happy tenants.  I may make some presumptions along the way, but I offer this analysis for the benefit of all landlords.

First, she screens her tenants methodically and chooses them based on sound criteria, like stable employment or business, good references, whether they are credit-worthy and tenant-worthy.

As she puts it, she “jumps” for her tenants.  They obviously appreciate this, which is a credit to her because she has chosen tenants who appreciate a good landlord.  Great screening job!  How often do you choose a tenant based on how appreciative they are for what they have? I never thought of that, either, until now. Your interview with the tenant should give you some insight into this quality or character about the applicant.

She states that she has never had an NSF cheque or even a late payment — wow! In addition to a good screening format which serves to eliminate high risk tenants, serious landlords should have the tenant read and sign the Notice to Tenant form which can be found in the forms section on the TVS website after you are logged in. Would you dare be late with your payment or write an NSF cheque after reading this? Not me, especially if I had a good credit rating.

If you were advised that you could obtain a Certificate of Satisfactory Tenancy, might that be a good incentive to pay on time? It would for me and it is for most tenants who have good pay habits and a good tenant history.

In addition to establishing credit and tenant worthiness via TVS, this member likely has her own criteria for what she looks for in a good tenant. I suspect that she might be doing a little more, like educating her tenants and talking about expectations.  Here are some examples of what she may be saying:

“I will fully comply with my responsibilities as a landlord, and I expect you to do the same as a tenant. Please review your rights  and responsibilities by visiting www.tenantsinfo.com and let me know if you have any questions.

“I will treat you with respect; I expect the same from you.”

“I expect rent payments to be made on time as the bank expects me to make mortgage payments on time.”

“We have signed a lease agreement; the terms therein must be strictly adhered to.”

In addition to the tenant screening process, there is much more that you need to do as a landlord to not only be compliant with tenancy laws, but just as importantly, you need to look and act like a professional so that the tenant gets the impression that they, too, must take their responsibilities seriously and perform in a business-like fashion.

Act like a professional from the first contact and throughout the  tenant screening process.

That means:

A great ad.

A professional-looking rental application that will only be accepted when completed in its entirety.

Credit checks.

References from current and previous landlords. Visit www.criminalfraud.com (click landlord fraud) to learn more about references– like how to ask devious questions to get the truth and make sure you are not speaking to the applicant’s friend.

Inquires with or letter from employer to determine stable income.

Request bank statements to prove  bi-weekly or regular deposits. Is there a bank account? Black out the dollar amounts if tenant deems that information too personal.

Take into consideration other factors you notice when you meet with the tenant — notice the overall demeanor, vehicle condition, grooming, politeness, and level of cooperation in completing forms.

If an applicant shows up late, refuses to complete the application in its entirety, or acts rudely, this likely is how will they act as a tenant  — they won’t pay rent on time, or clean up the property when asked.

After the screening process has been completed, there still is more work to be done:

Have the tenant sign a professionally-worded lease.

Complete Notice to Tenant.

Complete the Move In Inspection Form.

Take photos of  the rental unit showing the condition prior to move-in. Have tenant sign the back of each photo acknowledging accuracy of same.

Refer to your applicable landlord tenant laws for other requirements that must be done at leasing or move-in. These are typically available online.

On move in day, if possible, you should:

Take notice of what items the tenant is moving in. Is the furniture in keeping with what was stated on the rental application — for instance, single, no roommates, no pets, doesn’t smoke, no greasy auto parts, or clutter, or home business equipment, or huge heat lamps that quickly grow large green plants?

Check out who his or her friend are. Also,  observe how respectful your new tenant is of your rental property.

Periodic Site Inspections

Inspect the property regularly. My recommendation is every 6 weeks-2 months. Don’t leave it any longer.

You must do this!

This is a personal pet peeve of mine and this is the reason why many landlords suffer thousands of dollars in damage to the rental unit. They don’t ever inspect the property! This is one of the biggest mistakes that landlords make during the entire rental process. They never inspect the property to determine if the terms of the lease agreement are being adhered to with respect to pets using carpet as a toilet, roommates not on lease, smoking, maintenance, clutter, holes in the wall, and so on.

Landlords must inspect their property on a regular basis to ensure that it is being maintained!

Please keep reading the TVS Blog, as we will continue to provide you with good information. If you come across something that you think TVS members should know, or you have specific questions you would like us to research, please send it to me at  marv@tenantverification.com and we will do our best to get it out there.

I would like to see more comments on the TVS Blog like those we received from this member. Please share your good landlord habits or bad experiences with us.

Thanks to each and every one of you as you are a valued TVS member.

Remember — as the member above pointed out — treat the tenants the way you want to be treated.

Marv Steier, President

TVS Tenant Verification Service Inc.

 

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 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.

{ 7 comments… read them below or add one }

steve May 1, 2012 at 9:41 am

While I normally fully agree with what the info you provide I must disagree with the “you must do this” inspections every 6-8 weeks.

Many tenants, by this I mean anyone who is not an undergrad college student will take this as you treating them like children and will move out in short order. No one like to have their “home” wandered through by someone, feeling like they are being judged. Playing the role of big brother or their parents is not a good place to be in if you want your tenants to stay.

Treat them with respect and thank them every time they call with a problem even if they caused it. If something bother’s them enough to call you then be happy they called instead of getting angry at you, the building, neighbors or letting damage happen or utilities run up.

You are a fool to charge them if they plug up the sink once or have some random problem that they caused. If they chronically do something than maybe, but do you really want them not to call you just when it really matters. Like the roof leaks, something smells “hot”, faucets or toilet runs like crazy and drives up your water or hot water bill.

If you feel like you must go through this often (which says something about the tenants you are getting) then come up with good BS excuses so they don’t feel like you are just coming around to judge them. Examples : Servicing fire extinguishers, changing smoke alarm batteries (aren’t you nice), weather stripping check in the fall, inspecting/servicing the heating system, maintenance on random things (sediment in the hot water heater, water softener recharging). These all give nice, legitimate reasons to take a look around without looking like you are being big brother.

If you see a problem you better make sure you really want to address it. Just because you think they should clean or organize better is no excuse to make a comment about how they keep house. If is not really going to damage the place or cause a bug problem, let it go.

Marv May 2, 2012 at 10:58 am

Thanks for your comments Steve…so as we see from Steve’s comments, not everyone runs their landlord business in the same manner.

What I perhaps should have said was that…landlords “should” inspect their properties every 6-8 weeks. Many landlords feel differently about how often properties should be inspected, but speaking from experience, I can tell you that there are many landlords who WISH they would have checked on their properties every 6- 8 weeks.

I want to talk a bit about preconceived notions or perceptions that we all have. As Steve points out many tenants will feel like they are being judged and/or that you are playing the role of big brother or a parent and they may not like that. I agree that some tenants might feel that way, however I don’t think that all of them feel that way. It is not their property, its yours! What does the tenant have invested in it? What do you have invested in it? So why wouldn’t you want to know whether or not it is being maintained properly, or that only the tenants listed on the lease are occupying it. Or that pets aren’t ruining the carpet.

Could there be a liability issue with the Insurance Company if something goes wrong and you haven’t been diligently checking on the property? Could there be a liability issue with the municipality if there is criminal activity that jeopardizes the neighborhood or other tenants, and you haven’t been diligently checking on the property?

It is a landlord’s responsibility (within reason) to know what is going on regarding his/her property. In each instance we must be seen to do what is reasonable with respect to our properties, and that is part of the reason why you screen you tenants. You minimize your liability risk as well as minimizing your risk of income loss.

So let’s put a little different spin on Steve’s concerns so that this scenario might become a little more palatable for tenant and landlord. I understand where Steve is coming from. Let’s try an approach that might be acceptable to the tenant and satisfy the landlord’s inspection needs.

At the signing of the lease, and I have my Property Manager do this,the tenant is advised that: This is an investment property for the Owner and he wants to ensure that it is being properly maintained, if it was your property I am sure you would want to do the same. It is his responsibility to ensure that the terms of the lease agreement are being adhered to. This is for your benefit as well as that of the Owner. There is little room for misunderstanding where this is done, plus you can advise me if something needs to be repaired at that time. We also do a safety inspection to ensure that the smoke/fire alarms are working and that there are no other problems which might warrant fixing or replacing.
You will be given 24 hrs notice and the inspection can be arranged for whenever it is convenient for you and will only take a few minutes.

So…it is my opinion that we cant treat the tenants with respect by doing this, we can look after and maintain the rental property better by doing this, we might just minimize our liability risk with the insurance company by doing this, but most all…it sends a message to the tenant that you are concerned about the maintenance of your rental property, concerned for their safety and concerned that your are upholding your landlord responsibilities to make sure that everything is working.

As you can see everyone has differing opinions and different manners in which they run their landlord business. What we try to do here is educate,and present differing views & opinions. Steve thank you for your view on this and for taking the time to comment. I would like to see more comments and get more opinions from TVS/ATS members. This is for your benefit and we are always looking for topics to present to you. Chris our Writer does tons of research throughout North America on landlord related issues. We would like to hear more from our 14,000 plus members who receive this blog. Many members choose not to receive the blog, I wish that they would just read some of the blogs that we have. I think that Chris does a great job and I would really like more involvement from you, the Members. Many of you have tons of experience and experiences in the Industry. We would be very pleased if you shared them with us. You can email me directly or info@tenantverification.com or customerservice@atenantscreen.com.

Hintonburgrentals May 8, 2012 at 6:08 am

Hi Marv,

Thanks for the article. I don’t always come to check out the articles — life get’s in the way, but I enjoy them when I do read them. Much appreciated service!

Matt

PJShep May 8, 2012 at 8:50 am

The TVS member who “does it right” stated, “Often (tenants) choose to extend their lease for another 2, 3, or sometimes even 5 years. This is a win-win situation.” My worst tenants are a couple who have lived in the building for over 12 years. As a result they have a sense of entitlement, act like they own the place, complain constantly, try to give me instructions as if I were their employee and pay significantly less than market value for their apartment. There is nothing win-win about this situation. So while I treat all my tenants with respect and in a professional manner, I do not “jump” for them. In fact, I have encouraged such tenants to give me their notice to end tenancy if they are not happy with their tenancy.

Monica I. May 8, 2012 at 5:23 pm

What I’d appreciate is suggestions on how to constructively, and inoffensively give feedback to the tenants on items that require attention after a periodic mid-term inspection. I have rented my property to some early 20’s gentlemen who are notedly inexperienced maintaining a property, and performed their 6-month walk-through and found evidence of a pet (that is not allowed as per the lease), additional occupants (again, not permitted without application of the individual), and aroma of smoked substances that they tried to disguise by opening all the windows. As a female landlord, I’m not comfortable with confronting the tenants, but would like to have some format to provide them feedback that won’t encourage them to depart as tenants, but to be respectful of the agreement we signed.

Jay May 10, 2012 at 10:02 am

Cool nice to hear people providing this feedback. I’m a first time landlord and trying to learn all I can by subscribing to blogs and forums. Look forward to seeing more from you guys!

Dave from NJ May 15, 2012 at 5:55 am

I think I can see what everyone isgetting at. It would be great to treat all tenenats the same, but you can’t. Period. However, I tell mine that I EXPECT them to contact me AAP whenever there is any issue worthy of my attention. We al know that things will get banged up (happens in our own homes) but abuse will not be tolerated. This is conveyed at signing.
Further, it may be worth keeping a tenant for a number of years provided they are taking reasonable care of the place, even if it means a little less than the going rate. A couple hundred dollars extra a year disappears quickly in restoration costs. Regardless of screening, we all seem to get one here and there that is just awful… and costly. I make it a point to tell them that I will “throw them a bone” once in a while if they prove worthy. A window A/C unit, ceiling fan, bathroom “fixtures”, carpet, whatever. Nothing expensive, but not garbage. Sure, it remains my property anyway, and enhances the unit for the next tenant too! You would think that I gave them a million bucks! I have a reputation of being a favorite landlord and rarely have any issues with late payments or trouble.

Leave a Comment

Previous post:

Next post: