It’s really not as hard as it seems. And yes, for the average landlord – especially those new to the role – it can seem like a minefield of laws and regulations, and especially rights. Rights of the tenant that is. And yes, the stories you’ve heard are often true.
As a landlord, what you’ll be wanting to avoid of course is the tenant from hell. But how do we recognize them? We most often think of someone shady, drifting, under or unemployed, and most often single or in a broken relationship. Background and credit checks can go so far, but even these can prove unreliable at times.
For many successful landlords, their best tool or weapon is the gut check. This means of course meeting with the tenant or prospective tenant. Agents often vet and screen applicants, but sometimes requiring a tenant to briefly meet with the owner of a property – the landlord – is a lot more powerful. A little intimidating perhaps, but I think it’s prudent to ‘invest’ this little effort into your investment.
The obvious is the first and last month’s rent, plus the security deposit. Credit scores give a glimpse into how the applicant has managed their financial affairs, but these too can be manipulated to a point. Backgrounding is wise, as this will root out any elements which might be offensive. You don’t want a felon in your property, and anyone on an offender’s register list should be encouraged to move along.
Talk to people. A former landlord will know if your applicant is a tenant from hell, and they’ll have stories to tell you. Often with a measure of glee. If there are no contactable references by the applicant, this should raise a red flag. If there are strange holes in the history of where they’ve lived and worked, prod a little more for answers. And this is where your gut check will come into full swing. If at this point you’re getting warning signs, start backing out. You won’t have to look hard. But more so than listening to the words of your prospective tenant, watch for signs that alert you to inconsistencies or contradictions.
There’s no need to challenge anyone on the veracity of what they’re saying. Accept it politely without judgement. But keep in mind what you’ve experienced. And keep notes for later reference.
As a landlord and consultant to property owners, I’ve seen a lot. Wrecked properties requiring thousands of dollars in repairs. Abandoned homes, offices, shops, and factories where days and sometimes weeks of clean up work is necessary. I’ve even seen fixtures pulled from homes, and in one case an entire kitchen was removed, including the sink!
If you’ve got an agent handling the management of your properties, keep in touch with them and ensure they are regularly visiting your investments. If you manage it yourself, then make sure you’re doing the drive by as often as you can, or is prudent. It’s nice to have a comfortable relationship with your tenants and probably wise to be visible, but not imposing. No one likes a creepy landlord who’s hanging around the property all the time. Be friendly, and a simple wave will often be sufficient to stamp your presence without mental trespass.
Finally, while collecting rent is about the most important part of property ownership and investment return, it will be easier to manage if your tenant feels comfortable with you or your agent. If you present as intimidating, your tenant if struggling to meet rental commitments, might be inclined to conceal important information from you because of fear. This could in extreme cases turn what was once a good tenant, into the tenant from hell. And then you’ll have some stories of your own to share that perhaps you’d rather rot.
And as in all matters of financial difficulty – and let’s face it, it’s where the most conflict is likely to arise – keeping abreast of changes to your tenant’s circumstances – or being forewarned and having early room to negotiate or maneuver – could be the difference between an awkward but smooth transition from rented property to available property, and an abandoned and distressed property requiring weeks of repair and reinvigoration.
So talk to your tenant. They don’t have to be your friend, but being able to chat and chill easily will likely ensure you’re kept informed of any changes that you as landlord definitely need to know.