April 02, 2013

The tenets to finding good tenants

Inevitably, when you rent out a property, there will be times when things go wrong. Perhaps your tenants will fall into financial difficulties, or they will take less care of the property than they should. But if you choose the right person you can at least minimize the risk of problems. Here we offer some preventive and coping strategies to deal with those awkward situations:

Flattering to deceive

The vetting procedure is vital. It is far the best way of avoiding problems with future tenants. Any initial vetting of the tenant should not be turned into a counter-inquisition. The prospective tenants who try to turn the tables on you by asking you too many personal questions – or casting aspersions on your character – should be avoided. A typical warning sign is if they say “you seem like a trustworthy person” when the actual object of the interview is to establish THEIR trustworthiness.

A great service offered by Property Vista is ApproveVista. This enables you to check that your prospective tenant is the right person to move into your property by carrying out those crucial background and credit checks. You will then be able to make an informed decision, although of course you will also need to use your intuition and make a judgement call when you interview would-be tenants. Software tools are very useful but can never entirely replace the human touch.

Poe Tatum / Foter.com / CC BY-NC-ND

Use your common sense when you meet prospective tenants. It is as well to bear in mind that some very young tenants could potentially lead more wayward lifestyles than, for example, older, married couples. Also be aware of the possibility of accidents and spills when taking tenants with young children. You could insist on certain valuable furniture being covered or that children are kept away from certain areas if the property is sufficiently spacious.

Rent defaulters

Always distinguish between the good tenants who, through no fault of their own, have fallen into financial difficulties, and the irresponsible ones who simply don’t want to honor their obligations. The former will likely keep you abreast of their situation. If they have lost their job, or perhaps another own source of indispensable income, they will likely keep you posted.

If they go to ground, then the onus is on you to approach them in order to sort out a constructive way forward. Do not be rude or aggressive but simply point out that the rent is owing and ask to know why. Trustworthy tenants will explain their situation. If they have a track record of paying the rent on time, you should take that into consideration. Threats and warnings at this stage are inappropriate. Neither are they likely to be effective.

If your tenants have suddenly found themselves on a reduced income, you could come up with a new payment plan whereby they pay a reduced sum but on a REGULAR basis. The regularity of payments is the important fact here. Whether it is half the former sum – until their financial situation improves – or even a third, it is important that it is adhered to at designated intervals. Compliance with your reasonable demands will prove their good intentions. The tenant who simply has no intention of paying will likely become incommunicado or deliver false promises. In this situation – and in the wake of continual defaulting on the rent – it way be wise to consider evicting them from your property.

artist in doing nothing / Money Photos / CC BY-SA

The over-friendly tenant

Bear in mind that your arrangement with tenants is a business one that requires a commitment on both sides. Excessive flattery, and little acts of kindness on their part, are no substitute for paying the rent. If they offer to check on your elderly mother, who happens to live nearby, then that is welcome but that should be NOT be in lieu of paying the rent. Maintaining good relations with your tenants – sharing cups of coffee, exchanging books – is very desirable but this should never OVERRIDE the business relationship. Obligations should be kept to.

One of the problems with becoming too friendly with a tenant is that they tend to “forget” their obligations. If, for example, you stipulated that your tenants should not keep pets inside the property, and then you suddenly find a puppy living in the property – because he was just “so cute” – you should not be swayed by the friendship but insist that the original contractual agreement is adhered to.

The untidy tenant

The careless, negligent person can usually be spotted from the outset. The initial interview will usually reveal a person’s nature no matter how hard they may try to conceal it. (At one interview, the tenant sat down at our fine dining table, took out a piece of paper and then started writing on it on the table, leaving a mark underneath.) This was clearly a warning that the person concerned had no respect for the furniture or the property. You don’t want such a person in your property!

Occasionally, tenants seem responsible but standards start to slip. You should try to check on your tenants and insist on occasional viewings to ensure that the place is not becoming too dilapidated, untidy, or simply dirty. Some tenants may object to this but you should make clear – politely but firmly – that certain standards must be upheld. You could suggest that a cleaner comes in on a regular basis – and agree in advance who should bear the cost. Cleanliness is an important issue. When the tenant leaves, you do not want to face a marathon clean-up all at your own expense. A deposit should be given by tenants at the beginning and some of this deducted on their departure if the property is left too run down.

Occasionally you may have rent out a property knowing that it is not in tip-top condition and that it is – for example – susceptible to damp or other problems. In these circumstances the onus is on you, the owner, to be open with your tenants about the issues concerned. If problems arise in the property, for example a worsening of mold, or the breakdown of certain appliances that occur shortly after the tenants have moved in (and are therefore clearly no fault of their own) then your tenants will quite rightly expect their landlord to sort them out. Being reliable and keeping to your promises will set a good example to your tenants and give them an indication of the kind of person they are dealing with. It will also prompt them to do likewise and honor their end of the bargain.

But always honor your own responsibilities.

 

You may also like: 

Tips to finding better tenants

Avoiding professional tenants

ApproveVista – Tenant Credit Checks have Never Been Easier

 

by Gabriel Hershman

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Kris Boyce

CEO, Greenwin Inc.

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