If you want to earn more money with your rental properties, it’s essential to deal with inevitable tenant complaints. Understanding what the most frequent complaints are will help you be proactive and increase the chance that your best tenants will stick with you.
Whatever the issue is — a leaky faucet or ants in the kitchen — follow up with the tenant after you have addressed the issue. This shows that you care about them, which can go a long way in helping to build a good relationship.
If you’re too busy to manage day-to-day tenant affairs, consider outsourcing the work to an experienced property management company.
1. Find the best tenants for your rental properties.
Good tenants are the lifeblood of your rental business. It stands to reason that you need to put time and effort into finding the best ones you can.
A good renter pays on time, respects the property, and doesn’t cause issues. During the interview process, it can be hard to figure out who a good tenant is, but learning how to pick up on subtleties can help you find the best ones.
Finding good tenants usually begins by following a rental questionnaire to a T. Don’t get lax on checking out potential tenants or it could cost you dearly. With every tenant, you should check at least these six things:
- Confirm where they work and what their salary is.
- Find out how long they’ve been working there.
- Run a criminal background and credit check.
- Call every reference and ask questions about the applicant’s character.
- Call every former landlord and ask if there were ever any problems paying rent.
- Have a one-on-one talk with the applicant, in person.
Sometimes you’ll follow all the rules and still wind up with a bad tenant, but your chances of finding a good one go way up if you’ll just stick to the formula.
2. Set the rental price fairly.
Setting a rental price involves more than just picking a number out of a hat. When you determine how much you’ll charge, you need to find the highest price possible but keep it low enough to attract people’s attention. When you set your rates according to those two simple principles, you’ll attract quality tenants and keep vacancies as low as possible.
To land on the correct number, you should research what other property managers and landlords are charging in your neighborhood. You can use Trulia.com and Zillow.com to get a feel for what other landlords are charging.
Some landlords charge too little for their rent and don’t increase it often enough. This practice leaves a lot of money on the table. Some landlords never increase their rates and may lose hundreds per month on one property. Be sure to perform a review of local rental rates every year. Set the expectation of increasing rental rates by at least 5% if the market favors it.
You’ll also want to pay attention to home prices in your neighborhoods. If home prices rise considerably, rental rates usually follow.
3. Handle property repairs promptly.
You need to make sure that your rental homes are safe to live in and compliant with all local codes. Also, you should be responsive to any issues and concerns your renters bring up. Doing so makes it more likely that good tenants will resign their lease.
You may be tempted to delay repairs to save money. This is always a bad idea.
The longer you wait to perform repairs and maintenance on your rental properties, the more upset your tenants will become. Additionally, a minor problem such as a leaking faucet can turn into a major disaster. You might end up with water leaking through the floor and possibly even damaging the foundation.
Landlords also may be tempted to hire the least expensive contractor they can find. However, you should get several price quotes and look into the reputation of the contractor you’re considering.
Landlords usually get the repairs they pay for. You may pay more upfront for excellent work, but that investment will cost you less down the road.
4. Write a comprehensive lease agreement.
Legal documents can be a bit dull, true, but well-written agreements protect you when it counts. Make sure that your lease agreement is thorough and covers all the bases.
For example, you’ll need to clearly spell out your responsibilities and tenant responsibilities, when rent is due, and how much late fees are.
You’ll also want to make sure you consistently enforce the timely payment of rent and charge late fees. This is one thing that many landlords don’t do in the interest of avoiding awkward conversations. Not charging late fees represents money down the drain and, worse, you’re only encouraging more late payments.
You also should have the process spelled out for what happens when rent is so late that you have the legal right to evict a tenant.
Running rental properties can be a very financially rewarding experience if you do things right. If you keep these four guidelines in mind as you run your rental properties, there’s a good chance you’ll make plenty of money and be able to purchase more.