SMARTERLANDLORDING

ADVICE FROM EXPERIENCE

Dealing With Tenants

Tightening The Ratchet

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Headlines around the world are currently predicting another covid related crisis. This time it is an evictions crisis. As courts reopen and landlords are once again allowed to enforce their leases and property rights, evictions, it is said are going to throw hundreds of thousands into the streets. The homeless will be everywhere, from New York and across America, to London and Toronto.

Will hundreds of thousands of evictions be filed? Maybe. Will every single one of them proceed to an actual set out? Doubtful. In our company’s experience, most eviction cases are worked out before they ever get to court. Tenants start paying again work outs are made or tenants move on to somewhere else.

Yes, some folks are having a hard time paying the rent these days, we have seen it in our business. We have had to work with some tenants and let others move on because they simply could not afford their apartment after a job loss. But most tenants are keeping up with their side of the deal. In fact, stats from around the country show that above 85% are paying their rent and that number is only slightly below what was collected a year ago before all of this covid mess began. These states and my own anecdotal evidence make an eviction crisis appear to be far from imminent.

Nevertheless, the press is touting that a crisis of evictions is looming. As a result, my guess is that politicians are going to use this as an opportunity to respond. How? They will respond in two ways. First, where they can they will extend eviction moratoriums. Just keep the courts closed and problem solved.

Landlords, knowing that they do not have the courts to aid them, will in response elevate their screening methods and techniques. Landlords will work harder to keep potential deadbeat tenants out so that the need to go to eviction court declines.

This increased scrutiny by landlords toward potential tenants will lead the politicians to their second response, they will go after screening techniques. They will make the connection between lack of court enforcement and the increased screening done as a result. Politicians will then claim that landlords are denying people adequate housing. They will move to solve a problem which they created in the first place by closing the courts. They will make it harder for you to screen by expanding the scope of protected classes for example. Or they will work to ban screening techniques such as criminal background checks with “Ban the Box” initiatives.

The covid crisis has and will allow politicians to turn the ratchet tighter on landlords. Even when the crisis subsides, do not expect things to be completely loosened and returned to where they were. History shows that once tightened, things are never again loosened completely.

Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors.  Subscribe to Smarterlandlording here. Contact Kevin here.

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Will Rental Standards Change?

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During these unsettled times with covid making the rounds and social issues taking center stage, the criteria and standards we landlords use to qualify our tenants may change. These changes may be dictated by the local government as in St. Paul, or we as individual business owners may determine change is needed due to shifting market and social conditions.

When rents are climbing and the market is tight, we landlords can almost pick and choose who we want to live in our properties. As the market loosens, and I think it very well might do so in the near future, we have to become more flexible. We are also not immune to social pressures. Housing is in fact a growing concern for many across the country and legislation forcing changes to our business models is a distinct possibility right now.

Even with all of these changes that are and could possibly occur, we still want to find tenants who will pay, stay and respect our properties. These three criteria are what we should always be aiming for. There are many ways to achieve this goal and what works in one area or market may not necessarily be what works in another.

Of course, every landlord has to begin their rental standards with the federal fair housing laws. These laws protect certain classes from housing discrimination. These classes are race, religion, color, national origin, familial status, age and gender. Disability, military/veteran status and sexual orientation are others that often (and should) make the list. From there however things change with location and market.

For example, in our business we rely heavily on credit history. We operate in a market where using that criteria works well. There are markets however where that criteria will not. There are markets where most applicants will have poor credit histories. Thus, other criteria should and can be utilized. What sorts of criteria could you use instead? Perhaps job and residential stability. Seek stability in terms of employment and living arrangements. Examine if your applicant changes jobs and addresses frequently. If so, than they may not be right for you even with the best of credit reports.

Evictions are another criteria that are often used and which is currently under attack for being used in many jurisdictions. But in some markets many of the applicants will have evictions on their records. It just comes with the territory. Should you ban people with any eviction in their past? Maybe. But perhaps a better strategy is to set a time limit and look for positive change in the applicant. When was their last eviction? Last week? Last year? Ten years ago? When can make a difference.

Whatever criteria or rental standards you use and however you decide to change them due to changing market and political conditions make sure you follow the law and make sure you WRITE THEM DOWN. Keep a list of your criteria and standards on a sheet of paper in your desk so you can do to things.

1. Follow them with every applicant.

2.Show them to anyone who asks.

Trust me, doing so will save you much future grief.

Are your rental standards changing these days? Please share with a comment.

Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors.  Subscribe to Smarterlandlording here. Contact Kevin here.

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Good Tenant Screening Can Prevent Evictions

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Jurisdictions across the United States have halted or severely restricted evictions.. Only now, as I write this in late May 2020 are some states like Texas beginning to reopen the courts. How long will other jurisdictions remain closed? Will new laws be passed to make evictions, especially no fault evictions, more difficult? What if they decide to shut everything down again? What if, what if?

One thing we do know for sure, things will never be the same as they were before. We landlords can likely rest assured that courts will make the eviction process more difficult, that local governments will pass laws to restrict the types of evictions that can be done or institute new hurdles to do so. Some jurisdictions are even setting up systems (with tax dollars) to help tenants fight evictions.

The covid pandemic and the government response of closing the courts has emphasized the importance of one vital aspect of landlording, tenant screening. Tenant screening, especially now without the hammer of the courts, is perhaps the most important thing a landlord can do. It is more important that finding properties, repairing them, or even acquiring funding. Having a deadbeat tenant, especially one you cannot remove by the eviction process, will ruin you and your business.

With the courts closed tenant screening simply has become much more important. As a landlord, you just cannot let potential deadbeat tenants into your property. You have to learn and hone the skills to spot potential problems before they become your problem. I can tell you after over 15 years in this business, almost every tenant problem I have had, from evictions down to the complainers, has been because a red flag was ignored or an issue overlooked during the screening process. Yes, every problem tenant ultimately reflected back to me. In other words, I have had to learn the hard way no to ignore the signs or my screening criteria.

During this pandemic, several of our tenants have had problems. How could they not? Large sections of the economy have after all been shut off and their jobs have evaporated. Of course some people are going to have problems meeting their obligations when they cannot generate an income. But everyone has worked with us so far. Why? One, because we worked hard at screening and bringing in decent people. Second, we worked with them when they hit a problem.

Over the years and after screening hundred of tenants, we have learned to recognize the subtle signs of deeper problems such as a lack of interest, a sense of urgency or answers that seem just a bit too rehearsed. We have found that people are good at lying and you have to be better at detecting the lies. Deep down most of us want to trust and believe what others say. But you simply cannot. The reality of the situation is that as a landlord, you cannot accept anything you are told at face value. In fact, I guess I would go so far to say that we have to assume that we are being lied to until we find out that we are not.

Recognizing red flags and conducting thorough tenant screening are skills that can be learned. To help you, I wrote about 21 major red flags that every landlord should look for when screening tenants which you can get for free by clicking here.

Will you still have to learn some things that hard way like I did? Yes, most likely. But by educating yourself now and by starting to hold folks to a higher standard you can keep many of the headaches out and avoid the problems of closed eviction courts altogether.

Eviction Court Closed? Cash Can Persuade

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Eviction courts in many states are closed right now. Here in Tennessee the State Supreme Court has halted evictions until the end of May. This hold was deemed necessary because so many have lost their jobs or been otherwise impacted by the great supression. However, the closing eviction courts has also provided an incentive for some to simply not pay the rent and forced landlords into a bit of a corner.

But without the courts behind you, what can you do?

You do have options. You cannot use force, but you can certainly try to persuade. Evictions are costly and confrontational anyway. They create animosity and leave a potentially very angry person in control of a vary valuable and easily damaged asset. In over 15 years in the landlording business we have only been to eviction court three times. Instead, we prefer to use the power of persuasion and the power of cash. Sure, force may feel better at the moment the judge rules in your favor, but trust me, the hidden costs are always there and will make themselves known before you actually do get that tenant out.

The persuasive method I am referring to here is of course cash for keys and since I have written about that before I will not get into too much detail about it here. Suffice it to say that instead of using force, you pay your deadbeat tenant cash to leave and hand you the keys. We have successfully used this technique many times over the years and it is a very good option to use in these evictionless times.

Yes, I understand that it hurts the pride a bit to actually pay a deadbeat tenant, but that hit to the pride is a lot less painful in my experience than the expense and stress of an eviction and setout. Plus, what other option do you have right now? None.

How much cash should you pay for the keys? Depends on your situation, market and circumstances. You need to ask yourself how valuable it is to you to get the tenant out. How much rent are you losing? How behind are they? What will they take to leave? How stressful is it to you? There are many factors to consider but a few hundred dollars often does the trick.

Make your tenant an offer and see where it goes. Start low. Consider making an all cash offer or perhaps including a moving van or something else they want. It is up to you to be creative in these interesting times.

When pursuing the cash for keys option there are two “should haves” and one absolute “must have” for the landlord.

First, there has to be a certain date when the tenant agrees that they will be out. Of course you can always give a day or two leeway if you see that effort is being made but you have to have a set date. If they do not move by that date, they do not get paid.

Second, we insist that every piece of furniture, belonging and trash, down to the wire hangers in the closet and the Taco Bell sauce packets in the kitchen drawers, are removed and the place is broom swept clean. The last thing you want is to pay a tenant to leave and then have to pay someone else to remove their unwanted, stained sleeper sofa and other garbage.

On the “must have” side, you must get a signed release of the rights of possession form. Download one here. This form is a must because your tenant has to return legal possession of the property to you. You need something to show a judge, if it ever comes to that, that you have received legal possession from the tenant and that they have removed all of their belongings. DO NOT hand them the cash or take the keys until you have that signed form in your hands. If they will not sign, then no deal.

The courts will reopen someday. In fact, as I write this, Texas already has. You can make that known to your tenant and tell them that your offer will be much better than the one the receive in eviction court. Cash for keys might just therefore solve your problem.

Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors.  Subscribe to Smarterlandlording here. Contact Kevin here.

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The Future Of Tenant Selection?

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As the suppression of the economy continues, the effects are going to become more wide ranging. The numbers of people negatively impacted will increase and the ripple effects are going to be felt for months if not years into the future. As landlords, we will see these ripple effects as we screen and select future tenants. A lot of folks will have faced hardship. Landlords will need to keep that in mind and perhaps rethink and reevaluate our tenant selection criteria as we all move forward. What worked well pre-suppression, may not after.

To see where I am coming from think about some of the criteria that you currently use to screen and select tenants. Qualifiers such as income, employment history and past rental performance have long been used to find tenants who will stay, pay and respect our properties. A lot of what makes up those qualifiers has been disrupted for many folks due to no fault of their own. Now, do not misunderstand me as I am not saying that we will or should have to give up those qualifiers. But I am saying that we may need to be a bit more flexible and perhaps even more generous with them in the future.

For example, many landlords use an income qualifier, such as requiring an income of three times the amount of the rent, to select tenants. In other words, if the rent is $1,000 per month than an income of at least $3,000 per month would be needed to rent the property. In the past, this qualifier has generally been easy to verify as there was usually a definite and traceable work history. Will this be so in the near future?

Another frequently used qualifier is a steady work history. Landlords like continuity. We want to see that our prospective tenants can not only afford the property, but have also been consistently working at the same job, or same type of job, for a consistent period of time. After all, we do not want them to move in and then quit or lose their job. Such a situation is not conducive towards consistent rent payments. Consistency has been found routinely in the past. Will that pattern continue?

Layoffs and furloughs have reached points not seen since the days of the great depression in the 1930s. Many of our future tenants are therefore going to have gaps in their employment history. They will have changed jobs, moved towards new careers, moved to new locations and otherwise changed what was once a clear and stable pattern.

Past incomes and work histories may become more difficult to verify as businesses close and never reopen. Tenants may have moved back to their parents home or in with friends to conserve limited funds while getting back on their feet. In sum, patterns will change, sometimes significantly, and we landlords are going to have to be cognizant of that going forward.

Going forward, the keys to qualifying tenants will remain the same as always, that is uncovering patterns of negative conduct. But I believe the current disruptions that we see in the economy will alter these past patterns into things that could be perceived as negative. We will see many more disrupted life patterns. And while once that may have led us to potentially reject these folks I think going forward how we view these patterns may need to change.

Most of the time however, when prospective tenants are truthful about their past situations on the front end, the patterns usually line up and we are able to put the pieces together. Going forward, we landlords need to be aware that the pieces in the tenant qualification puzzle are perhaps going to be a bit more jumbled and take a bit more time and effort to put together.

Have any thoughts on how the business of landlording may change as the economy opens back up? Please share with a comment.

Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors.  Subscribe to Smarterlandlording here. Contact Kevin here.

Subscribe to Smarterlandlording and receive a Free Report: 21 Tenant Screening Red Flags

Should Landlords Make Side Deals With Their Tenants?

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As a general rule, I would normally say that it would be a bad idea to make a side deal, or an off the lease exchange, with a tenant. But, these are not normal times. The suppression of the economy due to the Covid-19 virus has forced many business to look at things differently.

Side deals are a common feature in the landlording business. Many landlords will make a deal with a tenant to trade some amount of rent for their labor, or perhaps even an appliance. For example, a landlord may waive part of the rent if the tenant agrees to paint their living room, or replaces their broken refrigerator. As I said, in general I am not in favor of such side deals. While on the surface side deals may seem like great ideas, it is my experience that these side deals tend lead to more problems than they solve. More on that a little later. Over the years I have found it much easier to just stick to the terms in the lease.

But, times are different now. Many tenants are likely to have a difficult time in the coming months making ends meet (some landlords too). Tenants will be faced with hard choices as their reserve funds dwindle. There are and will be calls for rent strikes and rent cancellations. We as landlords need to be aware of these situations and work to minimize the impact on our businesses, our properties and ultimately ourselves.

We have to ask ourselves if we would rather have vacant or occupied units? Do we want significant amounts of turnover and the costs associated with that turnover? How long can my reserves sustain these repeated turnover costs along with lack of rental income? Will we be able to find new tenants to replace those that have had to move due to covid-19 related financial stresses? Right now, in the middle of April, things may seem OK, but we are all still in the early stages of this suppression. What will the next several months bring? While I hope the overall impact is minor, it is perhaps to early to say with any certainty or that we are out of the woods.

Due to these circumstances I think it might be wise to consider side deals with tenants, especially if these deals can create a win/win for tenant and landlord. Would I recommend just making any kind of deal? No. Nothing illegal or unethical. But I might consider a payment plan for an otherwise great tenant who lost their job at a local hotel or restaurant. I might even consider using security deposits to cover rent for a while.

What would I not consider right now? Trading labor for rent. It just gets too complicated as I mentioned before. Sure the apartment needs to be repainted, but does your tenant even know how to paint? Painting is not rocket science but it does take some skill and practice.  Will your tenants do an adequate job? Further, how do you define “adequate job?” I would bet that your and your tenant’s definition differ. And when these differences arise, they can just make matters worse.

Only you can decide what is best for your business, but in these unique times we landlords have to think about doing things differently than we did before. A side deal with a tenant may just be the way to go to keep a good tenant in place until they can get back on their feet again. Get as creative as you wish, but whatever you do, get it in writing, even just an e-mail if nothing else. How far do you let these side deals go? Hard to say right now. We may all just have to see how far this crisis and suppression goes.

Made any side deals with tenants due to the great suppression? If so what are they? Please share with a comment.

Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors.  Subscribe to Smarterlandlording here. Contact Kevin here.

Subscribe to Smarterlandlording and receive a Free Report: 21 Tenant Screening Red Flags

Communicate With Your Tenants About Covid-19 Now!

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The Covid-19 crisis is hitting the US pretty hard as of this writing. As of now, no one really knows when or how the other side of this thing will be reached. Despite this uncertainty, the time for us landlords to communicate with our tenants is now. Now, before the end of the month. Now, before the rent is due. Now,before issues arise.

The long term economic effects of this virus are going to be wide ranging. Some effects are already being felt now. People are losing hours and income while others have been laid off. It will take some time for the economy to adjust and rebound (Don’t worry, it will). Until it does however, some of our tenants will likely face some difficult choices. When they do, the last thing you as the landlord want is for them to hide or stick their heads in the sand. Instead you want them to communicate with you. This is why you must open those channels of communication now rather than waiting on your tenants to do so. Because when your tenants finally do contact you, they may have already dug themselves into too deep of a hole.

Your communication efforts do not have to be anything too detailed or long winded. A simple e-mail of a couple paragraphs will do. We recently sent a quick e-mail out to all of our tenants. In it, we outlined just a few main points.

  • We acknowledged the difficulty of the current situation.
  • We asked our tenants to communicate with us ASAP if they run into any Covid-19 related issues.
  • We stated that by communicating with us, we would try to work with them in the near future.
  • We noted that non-essential repairs would likely be delayed but asked them to continue to report major repair issues through our property management software tenant portal.
  • Finally, we asked them to remember that we are a small business with bills and expenses and are not immune from the effects of this crisis but will do our best to get through it.

You might be asking what does “work with them” mean? Honestly, at this point we are not sure. We figure that will have to be examined on a case by case basis as issues arise. We did however note in our e-mail that any working agreement will be in writing and will become a part of the lease. There will be no verbal side deals.

Overall the response from our tenants has been positive. Most appreciate the effort. Hopefully, by opening up the lines of communication during this crisis we can head off others later on down the road.

Landlords, do not wait any longer. Communicate with your tenants today!

Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors.  Subscribe to Smarterlandlording here. Contact Kevin here.

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The Voluntary Landlord/Tenant Relationship?

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The landlord/tenant relationship is generally a voluntary one. Person A, the landlord, has a vacant property they wish to rent. Person B, the tenant, needs a place to live. The marketplace brings persons A and B together. They examine what each other has to offer, negotiate a price and decide to make an exchange. Person A agrees to let Person B live in their property for a certain amount time and amount of money. Everyone walks away from this voluntary transaction in a more favorable position, otherwise they would not do it.

Most voluntary business relationships are easy to end. One simply has to stop gong to a particular restaurant or store and that ends it. Or, the owner of the restaurant or store can refuse you service. With residential real estate rentals, it gets a bit more complicated. The landlord/tenant relationship has evolved over the years to remove this ease and actually penalize it. In doing so however, each side generally benefits.

Nearly all businesses, and landlording is no exception, desire stability and continuity. Businesses want to be able to determine the income that will be coming in and for how long. On the flip side, they do not want to lock themselves into a disadvantage if market conditions change. Tenants want some security. They want to know they they will have a place to live. After all, I would hate to have to move every month. These wants from both sides have evolved into the long term lease. Most residential landlords now use a long term lease of at least a year that bind both parties to location and price. Thus creating stability and continuity. Neither party can simply pull the plug on this agreement without some kind of penalty or compensation.

When the lease term expires, either party can usually end the landlord/tenant relationship just as easily as it was started. The tenant can simply move or the landlord can choose not to renew, thus requiring the tenant to move. But what if the tenant does not want to move? What if they really like your property and want to stay? Can they? Can they force the relationship to continue?

The answer is usually no. But, if they refuse to leave after you have asked them to do so, you may be faced with filing what is called a “no-fault eviction.”  In other words, you are filing to force the end of the relationship for no other reason than that is what you want to do. The tenant may be paying you rent. The tenant may otherwise be a model tenant but you want possession of your property. Perhaps you want to remodel. Perhaps you want to sell. Whatever the reason, your wish is to regain control of your property.

As rents continue to rise and the number of rental units continue to decrease in some areas, more and more tenants are starting to balk at being asked to move. They do not want to pay more rent somewhere else and their selection of properties to move to has decreased. In turn, tenants begin to ask politicians for help and politicians offer it by enacting bans or restrictions on no-fault evictions. Such events are happening in California and in Washington State and are forcing landlords into relationships that were once voluntary. Will this trend increase? Stay tuned and stay informed as to what your local politicians are doing.

Any readers try to conduct a no-fault eviction recently and hit problems? Let me and other readers know with your comments.

Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors.  Subscribe to Smarterlandlording here. Contact Kevin here.

Subscribe to Smarterlandlording and receive a Free Report: 21 Tenant Screening Red Flags

Can I Paint My Walls? Dealing With Tenant Redecorating Requests

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Most tenants are quite content to move in, pay their rent, live and be left alone. They understand that while your property may be their home, it is not theirs to do anything with that they please. Most tenants are this way. Others never seem to be content. They always want to change or tailor your property to better “fit” them.  

These tenants will want to do “improvements” to your property. They will have renovation requests such as “Can I paint my walls?” or “Could I plant some flowers?” I have even had tenants ask if they can put up wallpaper or install tile.

At first, these requests may sound reasonable to you. You might think that what the tenant wants to do will actually improve your property, that your property will look better when the tenant is done. In other words, what could go wrong? Lots. Let me dissuade you from these thoughts.

Many people devise grand ideas for things they want to do. Especially when something, such as school, a job or a place to live, is new and fresh. Think of the times when you were in school and said to yourself “I’m really going to buckle down and study harder this year!” Did you? Perhaps you did. But, if you are like most people, other things in life got in the way and as that feeling of newness wore off, often so did the ambition. Or that ambition was re-focused on other new things that arose in life.

Tenants are no different.

Over the years, we have said “yes” more that once to these types of tenant questions.  And 9 times out of 10, we have regretted it. Why, because the wall painting never really does get completed. Or the paint job is so bad that it has to be redone when the tenant moves out. Or they did not use drop cloths and splatter paint all over the hardwood floors. Other times, the tenant lies (shocking I know!) and paints the walls a totally different color than what was requested and approved. Do you have any idea how many coats of primer and paint it takes to cover black or bright green paint? I’ll save you the hassle by telling you at least four.

I have learned from experience that you simply cannot trust your tenants to do what they say they are going to do when it comes to these matters. Plus the picture of the completed job that you have in your head will not match the one your tenant has in theirs. All of this leads to aggravation and drama for both you and your tenant. Best to just avoid it in the first place by saying no.

Be glad however that at least your tenants are asking and not just doing. Hopefully the reason they are asking is because you have strict clauses in your house rules stating that tenants shall not make any property improvements or alterations without your approval. Hopefully you also made this clear when they moved in. If you do not tell them on the front end, believe me that many will just assume that making such alterations are OK.

The bottom line is that saying yes to these types of questions usually just ends up costing you time, money and aggravation.  Most of the projects that tenants attempt to take on have to be redone, and/or constitute a recurring maintenance issue. It is therefore best to make it policy that your property cannot be altered by your tenants.  No, you cannot paint your walls.

Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors.  Subscribe to Smarterlandlording here. Contact Kevin here.

Subscribe to Smarterlandlording and receive a Free Report: 21 Tenant Screening Red Flags

5 Ways To Keep Good Tenants

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A recent post delved into some of the reasons tenants move and the concerns it causes when they do.  In this post I want to look at how we can keep our tenants, especially the good ones.  

If I had to guess, I would say that about 95% of my tenants have been good and ones I have wanted to keep. What do I mean by good?  By good I mean that they pay their rent on time, they do not cause any problems or drama, they keep their places nice and clean and they let me know when something is wrong.  Otherwise, they mind their own business and keep to themselves.  These are the types of tenants I want to keep.  And keeping them requires some effort on the part of the landlord.

Fix It

This is likely the number one reason that tenants move.  You can read it again and again on blogs, on forums and in the headlines – “My landlord never fixed anything.”  Now I get that some tenants are overly demanding and some will never be satisfied.  Those tenants I happily let move on to become someone else’s problem.  But, by not fixing things you can actually induce good paying, low drama tenants into moving.  This turnover costs money.  Money on top of the fixing the things that you did not fix. Maintenance is hard and can be expensive, there is no doubt about that. But, vacant units that constantly turn over are even more difficult to your bottom line.

Be Responsive

Do you hate waiting on the phone to speak to customer service with your cable or wireless provider?  Do you feel like you are noting but a number to them and that they could care less about your problem?  Your tenant does too and the last thing they want is to get the same experience from their landlord.  Customer service is a part of this landlording business.  I’m not saying you should always bend over backwards to please your tenants, but just being a bit responsive can go a long way.

Work With Them

Good tenants sometimes have bad things happen to them.  When they do, they often have to make a choice between paying the rent, fixing the car, perhaps keeping the lights on.  If you have a tenant who has been good to you, perhaps it is wise to return the favor when they hit a hard time.  Yes, I know, I do not like being a bank or providing incentives to not get paid, but the costs of a good tenant moving can be so high that it might be worth it to you.  How far you work with your tenants is up to you.  In the past we have worked with tenants to set up payment plans to help them over a bad hump and get them back on tract. Small business landlords can be real flexible, while larger landlord operations may not be able to do so.

Don’t Nickel And Dime Them

No one likes to feel they are being taken advantage of.  And people hate it even more if they think that they are being unfairly exploited. While rents are on the rise most everywhere (along with our costs as well) it is perhaps not the best policy to consistently raise rents as often and as high as you can.  Sure, you could try to squeeze every last dime out of your tenants, but they can also get fed up and move out as well.  There is often a fine line here.  Think and tread carefully before crossing it.

Do Not Be Their Friend

Your tenant is not your friend and you as the landlord should not try to be theirs.  I’m not saying that you have to be surly or unkind.  What I am saying is that what you have with your tenant is a business relationship, not a personal one.  You should strive to keep things on that level. Tenants want to feel like they are been treated in a fair and consistent manner. Trust me when I say that they will notice when other tenants get special or privileged treatment.  You will be tempted to give special treatment if you become overly friendly with your tenants. They will expect it!  Avoid this situation by not becoming too friendly and by being firm but fair.

Working to retain our good tenants is an essential part of our business. Tenants can make it hard sometimes, but we landlords can also make it hard on ourselves.      

Kevin Perk is the founder and publisher of Smarterlandlording.com. He is the author of Advice From Experience To New Real Estate Investors.  Subscribe to Smarterlandlording here. Contact Kevin here.

Subscribe to Smarterlandlording and receive a Free Report: 21 Tenant Screening Red Flags