If you invest in residential rental properties, one of the best ways to keep your business going and earning you a substantial amount of money is to rent out only to the best tenants. Unfortunately, many property owners do not take the time to screen all prospective tenants properly and many pay the ultimate price of property damages, unpaid rent and more.
The first thing that you need to keep in mind as a rental property investor is that a décor that is neutral is easier to maintain than the more lavish. Do not waste your time fussing with wallpaper and bright colors that only make the rooms of your rental property appear smaller or fail to appeal to all tastes. Touching up neutral walls is incredibly easier than trying to match a specific pattern.
The next thing that you need to determine is how much you are going to ask for rent each month. Find out what renters are paying in the current market. Giving your tenants a longer lease will encourage them to stay in the property and thus take pride in the home.
If you are not managing the property on your own, make sure you choose the right people for the job. Look for property managers who are experienced with the type of properties you own. You also want to make sure you hire property managers who are honest and know how to treat tenants and handle new applications.
Finally, how you treat your tenants is important. If you take care of your tenants, then they are more likely to take good care of your properties. In addition, happy tenants often make referrals to their friends, family and other acquaintances. Word of mouth advertising is beneficial to any business type, especially rental property investing. Likewise, if you treat your tenants poorly, they will return the favor by vacating the property as quickly as possible, often without paying the owed rent.
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Hi Sean,
Being a rental property investor isn’t easy. Getting the right tenants who will care for your rental properties is like finding the holy grail. They’re not easy to find and when you do; you really need to look after them.
I think I’d much rather pay someone to manage my rental property. But, I’d really like to be kept in the loop about everything that happens.
Great article Sean…I manage my own rental but have made the mistakes you mentioned above…and ended up having to replace the plasterboard on two whole walls, which took me weeks after work, and recarpet the lot, eerrrr. I now have great tennants and know what to look for .
We watched a reality tv show which was based in New Zealand about renters and my husband and I were absolutely appalled about how some tenants treat the rental properties…and also how the real estate company which was managing the property had allowed such appalling treatment.
When we have some income which we can invest, we seriously want to look at diversifying into property, however the horror stories tend to want us to back away.
Finding a reliable tenant is key and these guidelines you have given are fantastic and have been saved on a word document for reference for later when we are ready. Thankyou!
Hi Sean,
Successful property investing is so much easier when your rental properties all have good tennants.
Jayne,
Yes those T.V. shows are frightening and such tennants do exist(we have had a couple) but dont let that stop your progress, property investment is a sound vehicle for wealth creation.
What comes around goes around. Treat others well and you shall reap what you sow.
I love the fact that you mentioned this Sean (not quite in those words). It is also true about hiring honest reliable property managers to help you with this if it is not something you want to take on yourself.
It is so important to spend the time finding out how to get the best tenants as it will pay dividends in the long run.
Cath
Jayne,
Likewise we have had tennants from heaven and hell. The best and toughest Property Manager in our district who was also our friend, got us the worst tennants ever, she didn’t know that at the time as they passed all her ruthless testing!
Luckily you can get landlord insurance and some of them will cover you for rent for about 12 or so weeks if the tennants take off. It is a tax deduction so worth getting a good coverage.
It is a fact that most tennants are not going to look after your property the way you think they should.
Often because they don’t own the property, they don’t take much pride in it. As Landords our expectations can be way too high in relation to the tenants so we need to strike a happy medium.
You may not mind your tennants having a puppy or a cat but you may need to draw the line at them having ‘reptiles’. Very important to specify these things in the lease.
I imagine anyone can ‘disguise’ their habits etc as tenants and pull the wool over a property managers eyes. It is hard to get accurate and completely honest references. Some RE people give a good reference so they can get rid of a troublesome tenant!
I meant to add before that looking after good tenants well is one way to retain them, so that the hassle of looking for replacements is reduced.
I live in a small block of units and we are looked after very well. So the tenancy has been really stable here. The rent isn’t outrageous, we get quick response for problems and not overly hassled with inspections.