After investing in your rental property, your tenants become your most valuable asset. They help determine your staying power in the real estate business, and therefore serve as valuable additions to your property's value. Selecting good tenants is a difficult role for most landlords, but not because of the caliber of tenants. There are many decent potential tenants waiting on the right housing opportunity. The problem lies with the approach to finding the right tenant.
1. Property Appeal—“Like Attracts Like”
Before you can find the right tenant, you need to invest in your property. When your property looks immaculate and is located in a desirable part of town, it will attract the kind of tenants you want. Conversely, if it looks “run down,” it’s unlikely you’ll find the model tenant you are looking for.
Since “like attracts like” in the real estate industry, landlords with well-maintained properties are more likely to attract tenants who are willing to uphold the same standards of house maintenance as you are.
2. Lease Agreement—“Your Word is Your Bond”
Like a marriage contract, the terms set out in your landlord-tenant agreement are legally binding. To foster a long lasting future with the ideal tenant, start the relationship off on the right footing; draft a lease that is reasonable and respectful of the needs of both parties and be sure to review the document in full with your prospective tenant.
Even after the lease agreement is signed, differences can arise. Experts strongly recommend that both parties attempt to resolve any issues with each other before seeking outside help. Probably the most important advice to resolving landlord-tenant disputes is for both parties to read the lease agreement and become familiar with each other’s obligations.
3. The Rental Business—“It’s a Business Relationship Not a Friendship”
Communication is at the core of any great relationship; however, it’s a very different dynamic when a tenant thinks of you as a friend. With friendships, special privileges and concessions are expected and that can compromise your business investment.
Be courteous and professional. Keep your relationship on a business level, communicating clearly any new arrangements to be implemented and ensuring terms are understood before documenting.
4. Property Maintenance—“Happy Tenants are those who are Routinely Maintained”
Happy tenants are extremely important to your real estate business, and good tenants are happy tenants. The way you keep them contented is by keeping your property in good shape. Fix leaks, replace old fixtures and fittings, and inspect the home annually. You may want to keep a list nearby of good plumbers, electricians and tradesman to refer to when needed, if a problem were to arise.
5. Negotiate on Some Terms—“Yield to Understanding”
Don’t be too rigid with house rules that you scare away good tenants—be flexible and negotiate. You may hate having pets on your property, but if a responsible tenant wants to move in with a family cat, there is little harm in making revisions to accommodate that request. As long as all newly negotiated terms are in writing, your leniency will stand to benefit your relationship in unexpected and fruitful ways. Many landlords find that being pet friendly makes them stand out from the crowd. Often they attract good tenants who are happy to pay more rent for pet accommodation.
Model tenants reliably tend to their obligations. They pay the rent on time, take care of your property and are respectful neighbors in the community. The bond you help create with your tenants can only strengthen your investment.
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