What are the Benefits of a long term Tenant / Renter?

The question is a very easy one to answer! .. the longer your tenants  / renters stay in your rental properties,  the more consistent your monthly rental income will be.

This then lets you plan into the future with more confidence.

How to nurture happy tenants / renters

One of the best ways to keep your tenants / renters happy is to have in place a maintenance program which they are made aware of.

They can live in your rental property and know to expect maintenance tasks to be carried out at certain times in the year.

The effect of this is twofold

(1)  Your tenant/ renter feels cared for and comfortable with your style of management,

(2)  They are going to be less inclined to look “over the bridge” and want to move.

The longer your property is filled by a tenant / renter you will find a number of additional psychological factors start to have an effect.

• They become familiar with the neighbourhood
• Friends and family become familiar with the place they are staying
• They become more involved with the community
• They get a feeling of  belonging.

These factors are all latent, hidden factors which, when combined, help to make your tenant / renter comfortable and happy.

Give more reasons to be cheerful

It is part of your job to make sure that you add to their feeling of comfort by ensuring that your maintenance tasks,  which you have listed and shown to your tenant / renter,  are carried out by the dates you said they would be completed.

You have started to establish an important bond of trust which can grow the longer they stay, as long as you do what you say you are going to do.

Tenants / Renters problems become your stepping stones

You also have to ensure that whenever a problem occurs with the property (at 22.00 on a Friday night a phone call comes in about a leaking pipe, or a blocked toilet or a problem with the gas  … in fact a problem about anything!) you have to attend to it straight away!

The hassle and inconvenience of late night call outs can be mitigated considerably by having in place a list of Trades people ( see the article “Prolong the Life of your Rental Property Tenant” ) who can carry out the work timeously and to an acceptable standard.

Knowing me .. knowing you

Always make sure that your tenant/ renter can contact you either on your office number,  your mobile or by email.

Often,  if a problem is reported late in the day or late on a Friday, or over the week-end, the tenant/ renter does not expect it to be attended to until the following Monday (unless it is really major).

If you have your Trades people in place, more often than not,  they will attend to the problem before the Monday,  and you will be in the good books even more!

A problem quickly solved

Again, the very fact that a problem at your rental property is quickly solved,  means you have turned a problem into your own stepping stone of progress to acceptability. Now your tenant / renter feels even more cared for, and increasingly less inclined to move away.

What I have noted above is all common sense and not difficult to do.

Don’t slip up!

If, however, you breach the trust that you have built up, it can take an inordinate amount of extra time to repair the damage and get back to where you were before.

During a spell like this, you have more chance of losing your tenant and losing your regular monthly happy rental cheque.

So,  the moral of the story is “don’t let a slip become a landslide!”

You will have advertised your rental property, and you will be starting to take enquiries for it.

How do you screen those enquiries and sort out the wheat from the chaff?

(1)  Always put the Family First!

I always put great store in existing tenants referring a family member to us for an empty property, or a mother or father referring their son or daughter for an empty property.

It would be good to only have these kinds of tenant, however, there are many times when you have an empty property and you want it filled ASAP.

(2)  Shut up and Listen!

Firstly listen to them on the phone, and listen to background noises. If there is a lot of noise in the background it means they are not thinking about trying to create a good first impression and this sets a wee alarm bell ringing.

(3)  Gut Instinct and First Impressions

When you meet your potential new tenant their appearance and clothing and mannerisms can tell you so much and help you decide if you want them as a tenant.

Punctuality is also another factor to lodge into your overall mental impression of the tenant along with other areas already mentioned.

What you have to realise is the fact that a lot of your decisions to take a person on as a tenant come from first impressions and your gut feeling.

These two factors are very important to take into consideration when assessing a potential tenant.

(4)  Previous Landlords and Previous Addresses

Previous landlords are important, although you have to decide if what they are saying to you is truthful or just a plain convenience story to help out their friend who happens to be the applicant for the tenancy!

If their previous address is not too far away, you could pop by and just get a feel for the condition of the property.

(5)  Use the Credit Check for more than just a Credit Check!

A credit check is always, always a good idea.  They are not too expensive to carry out and you should insist on payment upfront for the reference fee,

This type of check should include a name check, an address check and an employment check.

On payment of the reference fee, you can tell them that the property in question will be “on hold” until the tenant credit / reference check results come back to you.

Payment of the reference fee shows commitment on behalf of the tenant and confidence in their ability to be able to produce a clean set of results for the credit / reference check.

(6) Is their car a Rust Bucket or a Showroom Model?

If possible try and see the type of car they have arrived in, and make a mental note as to the condition of the car.

(7)  Thinking time to change your mind

If potential tenants view a property and immediately say they want to rent it, it is never a bad thing to give them at least 24 hours to think it over.  It is amazing how often a “Yes I want it” can so quickly turn to “I’ve changed my mind”.

(8)  Is the Rent Affordable?

If the potential tenant is working they will be in a good position to pay the rent required.

If the tenant is not working, and in receipt of benefit payments of some kind, you have to make sure that these payments will come to you, and that they will be enough.

Should the benefit payments not be enough to cover the entire rental payment, ask them how they plan on making up the shortfall each month?

Vague answers mean they don’t know, or they haven’t thought about!

(9)  The Deposit

This is an important part of deciding if the tenant is suitable or not.

If the deposit is readily available, the potential tenant scores a maximum 10 / 10! This is a good indication that the tenant will be acceptable.

Having the deposit, gives you, the landlord many reasons to feel comfortable.

If the deposit is not available, and the tenant asks to pay it up over a number of weeks or months, will leave you in a vulnerable position.

What happens if the property is damaged and there is no deposit and the tenant absconds?   …   Who pays for the damage?

If you need the property rented and you only have this type of applicant, make sure you have at least one and possibly two, guarantors in place.

(10)  The Role of Guarantors

Guarantors can be former employers or family.  They will be responsible for the non payment of the rent.

This helps to keep the tenant from being late with their rental payments and having the embarrassment of knowing that we will contact the guarantors who will then contact them, and tell the tenant to pay up!

Brieff summary

Having gone through the above list and obtained the information mentioned, you have the ammunition to help you come to an important decision, which is backed up by a variety of “cross checks”.

You will not always be right with your choice, but you will certainly have every reason to believe that you are right!

Prolong the life of your tenant  ..  It is not rocket science here, it’s pure common sense  ..  Trades people are your “gold dust” ..  When people talk .. others listen and believe!!  ..  Freshen up all the time  ..  Internet technology and nettles  ..  Create a website that is an offshoot of your main property rental website  ..  By now your grey cells must be working overtime!  ..  Free Home Delivery is a great add on!  ..  Now take another step!  ..  Arms & Legs!  ..  No need to think twice  ..  Why stay in contact?  ..  Stability and cheques!

Prolong the life of your tenant

Running a property rental business has many issues to address, but the number 1 issue you have to address is to fill your property, and whenever possible, prolong the life of your rental property tenant!

If your tenant is going to leave,  for whatever reason,  you are then faced with the task of filling your rental property again!

If you have taken on board the ideas in the article “Advertising ideas!” … you really should not have too much bother filling your property …. But why not totally avoid this situation happening? .. or at the very least, reduce the number of time a rental property tenant says they want to leave!

It is not rocket science here, it’s pure common sense.

Your tenants need to be treated like real human beings; they need to be contacted on a regular basis.

Any, and I mean any problems they report, about the property should really be dealt with immediately.

I cannot recommend strongly enough that to keep your business ahead of your competition, you need to have tradesmen on hand who can respond to water, gas, electric or other problems “at the drop of a hat”.

Trades people are your “gold dust”

Because you are running a rental property business, it means that you are always going to need trades people, and they know it.

They want to give you a service you can rely on….. if they don’t,  it is quite simple for you to say “goodbye” and move onto another tradesperson who is keener to make an impression,  and keener to establish a long term relationship with a firm they know will give them work on a regular basis.

When people talk .. others listen and believe!!

The knock on effect of having quick, reliable and competent trades people on hand, feeds down the line for you.  You don’t know when it will happen … but people will talk about your business

“ I called late yesterday and they were out after only 1 hour .. I was relieved to not to have to wait! “

“The water leak was sorted so quickly by my landlords’ plumber! ”

“I had a problem with my washing machine and the landlord had someone  out within 4 hours,  and they mended it there and then .. that was great!”

These are the sort of comments you want to hear from your tenants time after time after time!

Your tenant feels  important and comfortable with you, and as a consequence less inclined to look about for other places to stay if they know they are being looked after.

Freshen up all the time

Wherever possible, try to keep your property “fresh”   .. well maintained and well decorated.

There are two  reasons for doing this ..

(1)    You are maintaining value.

Whenever you come to sell your rental property, you do not want to be faced with huge costs to “get the property ready” … it’s far easier to do little tasks regularly to keep improving and upgrading your property.

(2)    Your tenant will like that!

If your tenant is living in a property that is being looked after .. they will feel looked after.  This really does add to their” comfort zone” and is another reason for your tenant to stay your tenant.

Internet technology and nettles

Grasp a nettle and you feel pain,.. but, touch a nettle carefully…. and you will avoid pain,  allowing  you to move on to bigger and better things…

Think about this for a minute.. You have a website advertising your properties… you have touched the nettle of internet technology and you can now use it without pain …  so why not take it a stage further and harness more possibilities from the internet…. and use the internet to help you grow?

Create a website that is an offshoot of your main property rental website ….

Tell your tenant that because they are your tenant, they will gain special access to your special and exclusive Online Shopping Website.

By now your grey cells must be working overtime!

Take this as far as you want.

In setting up your online shopping website, you will have affiliated with a number of big name stores …. They want the business and they will pay you a commission for you sending customers to them.

Your tenant gets access to exclusive deals and vast choices, all from the comfort of their chair in their warm house.

Free Home Delivery is a great add on!

Free Home Delivery cuts out the hassle of having to find parking and practise Olympic weightlifting as they  carry shopping bags for what seems like miles and miles!

The convenience of tapping a few computer keys makes this a great “add on” for your tenants.

Now take another step!

You can even expand your website idea further and offer your preferred trades people a spot on your website under “property maintenance”  …. Any enquiries you receive can then be passed on to your trades people …they will appreciate this advertising on their behalf!

Arms & Legs!

Now you will find this website idea developing arms and legs….  as you realise you can offer your tenants online booking for Holidays, Plane journeys, Train journeys, Car rentals……. this list can just grow and grow!

So many companies are happy to “affiliate” with you, and you can offer your tenants a service which they would lose if they left your rental property.

No need to think twice

All the above points in this article will help to create a more than convincing case for a tenant to think twice before deciding to move.

Why stay in contact?

Keeping in contact with your tenant definitely helps to prolong their tenancy.

This simple task has so many beneficial effects that will let you build a rental portfolio that consistently has tenants in situ for long periods of time.

Stability and cheques!

This stability cascades down into your pocket.

You will receive regular and consistent property rental cheques, and if your online shopping takes off. who knows where that will go!

Stable and happy tenants let you achieve a peace of mind that many property rental businesses do not have.

Your lawyer will make sure it is understandable, lawful and contains the correct terms and conditions.

This can save so many complications in the future.

This article is for both landlords and tenants to read.

It does not cover every aspect of a rental agreement,  however,  it does give important “pointers” in a number of key areas.  The areas covered in this article include:

Read then sign  ..  USA Renting  ..  Rental Agreement choices  ..  Missed rental payments ..  Tenant living at the property  ..  Tenant not living at the property  ..  Effect of unpaid monthly rental payments  ..  Deposit / Bond monies  ..  Utility providers  ..  Pets  ..  Guests

(1) Read then sign

It is always best practice to ask the tenants to read each page of the contract and sign each page, thereby confirming they have read and understood all the terms and conditions contained within the lease contract.

(2) USA renting .. Interesting point to remember

If you are renting in the USA,  it is a legal requirement to make sure that the tenant is made aware of any lead based paint in your property ( for buildings constructed before 1978 ) and they must sign a “disclaimer” which confirms they understand the fact that lead based paint is in the property and they are comfortable with this.

(3) Rental Agreement choices

Normally owners have a choice between two types of rental agreements when renting out their property

(a) The Rental agreement

(b) The Lease Contract

(a) The Rental agreement

You will find that with this type of agreement, there is not a length of residence requirement, as the agreement runs for only one month at a time.

At the end of every month, changes to the rental agreement can be requested to be made by either the tenant or the rental property owner.

• One of the main reasons for a change in the rental agreement is the owner wishing to increase the rent.
• Another common reason for wanting to change the rental agreement is a request by the tenant to leave the property.

All changes to the Rental Agreement require a notice period of 30 days.

Due to the short term nature of this type of agreement, it is best used for a property where it is difficult to find a long term tenant, for students or for people who travel a lot with their jobs and require only short term rentals.

(b) The Lease  contract

This is a much more specific type of contract and specifies a set time period for the contract to run and should detail the following information:

It should indicate a specific period of time for the lease.

Normally the initial period of a lease is 6 months, with the option to renew after this period of time.

Some people want more secure timelines, and, if the landlord agrees, they can have a 12 month lease.

Whatever time frame is decided upon, from the outset, until the lease expires,  both parties must adhere to all the terms and conditions contained within the lease rental contract.

During the tem of the lease, the terms and conditions cannot be changed.

A 6 or 12 month (or even longer timeline) lease gives both the owner and the tenant a stable situation, and peace of mind.

If a mortgage is in place with the property,  a long term lease helps provide the owner with the security of knowing that there will be rental income each month for the agreed period of time.

(4) Missed rental payments

It is always necessary to point out to tenant the consequences of not paying their monthly rental payments during agreed time frame of the lease contract.

(5) Tenant living at the property

When a tenant is living in the property and not paying rent, the owner/landlord is entitled to get the tenant evicted, and then purse the tenant through the courts for unpaid rental payments plus all legal expenses incurred.

The legal costs can be quite substantial in addition to the missed rental payments.

(6) Tenant not living at the property

In a situation where a tenant has moved elsewhere before the end of the lease contract, the tenant is still liable for the monthly rental payments. Failure to fulfil the payment terms contained in the contract will lead to legal action, as described above.

(7) Effect of unpaid monthly rental payments

Should eviction and court action take place, the tenant will be faced with detrimental entries on his/her credit file,   thereby affecting all types of future financial transactions.

So, the moral of the story is for tenants not to miss their rental payments.

If their financial circumstances change, it is always best for the tenant to approach the landlord/owner and explain the situation.

“A problem shared is a problem halved”.. and some kind of compromise may be possible.

(8) Deposit / Bond monies

On the day the lease contract is signed the landlord will expect to be paid 1 months rent plus a deposit (sometimes called a Bond) . This Deposit / Bond is to be no more than month’s rent and should be acknowledged immediately by the tenant being given a receipt. The receipt should clearly state the amount paid and the date the Deposit / Bond was paid.

In the USA, the Deposit / Bond money must be lodged with the Office of Rental Bonds. If the Deposit / Bond money has not been lodged within 2 weeks by the landlord, with the names of everyone who has contributed to the bond; then the tenant can obtain an order from the residential tenancy tribunal which will force the landlord to pay the bond to the Office of Rental Bonds.

(9) Utility providers

Normally the landlord will have the property with a particular utility company for your heat and power and telephone needs.

If you know of less expensive or more efficient utility companies, tell the landlord, and request a change.

It takes a matter of minutes to change to a different utility company,  and doing this can save you a considerable amount of money over the term of your lease contract.

If you think about it,  you are paying these bills, so it makes sense to find the best deal whilst you live in the rental property.

(10) Pets

If you have a pet, or pets, it is always most prudent to check with the landlord at the outset of the rental property lease, whither or not pets are allowed.

(11) Guests

This may seem strange, but if you are expecting a friend is going to be staying a long time at the property, and they are not on the lease, it is always a good idea to tell the landlord beforehand and make sure he is okay with this.

…………………………………………….. end of the article ………………………………………………….

The next article will look at a successful Real Estate Entrepreneur and what he can offer my readers!