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Every Good Landlord Has Rules In Place

Owning a rental property is one of the best ways to accumulate long term wealth. Having a tenant pay down your mortgage every month almost sounds too good to be true. The reality is that being a landlord can be difficult at times. If you do not have good tenants in place every month can be a challenge. There is nothing you can do to guarantee good tenants but there are rules you can put in place. Having a strict set of guidelines for your property makes it more likely to weed out the bad tenants and keep your rental investment running smoothly for years.

You can still be friendly with your tenants and have strict rules to follow. You may have the type of personality that wants to get along with everyone but you need to remember you are running a business. For as many great tenants that are out there all it takes is one to set your business back. An eviction will take up most of your time for at least several months. Not to mention the financial position it will put you in. By having rules and guidelines to follow you have a better chance of finding bad tenants out as soon as possible. You can be a good person but you still need to have these in place.

Before a prospective tenant fills out an application they should have an idea of the expectations. Basic items such as smoking and pets should be mentioned in the first conversation. It is important to discuss security deposits, down payments and other basic demands before moving in. You will often hear sob stories from tenants asking for a few weeks to get the security together. If you give into this you set the tone for how the rest of the lease will go. Most tenants know that you need a security deposit to move in. If this catches them off guard this may not be the tenant for you. Besides the security deposit there are also several other items that should be brought up. You can bend your rules in some areas but if these are important you need to stand your ground.

• Late payments: The purpose of setting up a fee for a late payment is to dissuade it from happening. With any payment that is late once you go past ten days the odds of payment decrease every week. You are not looking for the $50 fee your goal is to get your rent on time every month. You can give a grace period of five to ten days but you need to make it clear that if the rent is received after that there will be a penalty. Mailing it out on the 9th will not get to you the next day. The late fee will either be a reduction in their security deposit or added to next month’s rent payment. If the rent is received after the 10th you have the right to begin the eviction process. These are drastic measures but you need to talk about it before they move in.

• Pets/smoking: As already mentioned these should be cut and dry. Some tenants will try to sneak in a pet or ask you for one once they are in the house. There is nothing wrong with pets but some can do damage to the property. Also, they can be a nuisance to the neighbors who will contact you. It should either be all or nothing with pets. Once you start choosing specific types of dogs or cats you might as well just allow all pets. You can have a tenant that smokes but you need to make sure they do it outside. Additionally they need to keep all cigarette butts off the yard. Smoke can linger in a house long after your tenant leaves.

• Condition: When your new tenant walks the house the first time it is important to note the condition of the property. You need to make is clear on what the condition needs to be to collect their full security. Normal wear and tear is expected but if closet doors are broken or the couch is ripped you will deduct for this. You want your property back the way they found it. If the condition isn’t the same it is on them to fix it.

• Parking/Noise: Most properties have rules in place about where you can and cannot park. These should be fairly cut and dry. It is important to make it known that you will be strictly enforcing this. The same should be applied to noise. If you rent to college kids you should expect the occasional party but this shouldn’t be an everyday occurrence. If the neighbors complain you will give them a warning but after that they run the risk of eviction.

The biggest thing with any rules is to attach a penalty if they are broken. Take the time and go through the lease before your new tenant moves in. Make it clear what is allowed and what is subject to penalty. There may be some questions and you will be forced to stand your ground. This may be out of character for you but by doing this you will have better tenants. Better tenants make all the difference in your rental property. It starts with setting rules and being willing to enforce them

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