In today's real estate shop the key to prosperous lies in "good tenants." Many citizen fear becoming property managers and for good reasons, but if you indeed want to effect in real estate you need to think long term. That's right... History has proven that real estate doubles every 10 to 14 years. The question is that many novice investors purchased hoping to flip for a small fortune and greed led them to invest in properties that were very negative in cash flow production. However, if you invested wisely the most pressing question you will have to deal with is choosing the most considerable and finally profitable tenants.
Because I want to empower you to effect I am going to share with you my top 5.5 tenant problems and how our team of experts maximizes on those opportunities. There are some straightforward strategies that you can apply to your real estate investments to do the same. If you effect these fundamentals not only will you make money, you will avoid a ton of headaches. So let's go over these opportunities right now.
1. Non payment / Late Payments/ Bounced Checks:
If you "the investor" are the one paying your own rent on an already occupied property, there are severe problems with your cash flow. The same goes if your tenant is constantly paying you late or even bouncing checks. While there are a multitude of reasons for tenants not keeping their end of the bargain, the root of the question lies in a bad screening process of tenants up front. This includes weak lease agreements. If you want to avoid these major problems you will need to...
- Verify prospect's prestige history
- Make sure to taste references
- Have a correct legal lease agreement
- Keep good transportation with your tenants
- Offer rewards for paying on time (Discount a month's rent after consistent payments)
- Don't be afraid to go after your money legally
I'm not saying that doing things right up front is easy (or cheap) but finally seeing the right person(s) as tenants will advantage you in the long run more than roughly anyone else in the buy and hold real estate game except for buying at a discount. Keep in mind that if you are not willing to obtain your money, you won't be in this business very long.
2. Illegal Activities:
Whether you own a residential property or multi-unit buildings, illegal activities can destroy your property values. Many times tenants escort illegal activities in the properties they rent from you the landlord- leaving you the owner liable for many inherent problems. This was an issue I had to deal with when we as a network purchased over 25 town houses last year. It was horrible to learn that some of the tenants were dealing or using drugs. We knew that if we did not act fast it would sway the over all value of our investment. Because we have zero tolerance for crime we notified the local authorities with these problems and let them do their job. We also encouraged our around good tenants to do the same. In less than 6 months the neighborhood had a much great atmosphere- one that made citizen feel safe.
Can you see why you too should deal with these issues at the root?
3. Bad Maintenance:
The poor upkeep of your properties can cost you Big in the long run. Tenants are not by nature irresponsible. However, human beings as a rule more often value that which they own. So challenge your tenants to be responsible, by not only keeping the property in good condition but also by reporting issues as they arise. Make sure your lease bargain covers this section in detail. Walk straight through the unit with your tenants before handing over the keys. Also, I would very recommend you drop off a new air filter at least quarterly. Most tenants never convert their filter, which can cause your central heat and air systems to break over time. By dropping off a new one it will give you an chance to study the condition of your venture without prying- but be sensitive to privacy and non-intrusive. In fact, your tenants will likely thank you for the extra service and you will be rewarded by avoiding many costly issues that are caught on time.
4. Unauthorized Residents:
Any resident that has not been screened or signed off on your correct bargain can pose a high risk to your venture because they are not bound by the standards in your contract. citizen tend to act differently when no one knows who they are or can hold them accountable. This usually occurs when an authorized tenant brings in a roommate without contacting you. The best way to avoid this inherent liability is to fee an supplementary fee for roommates, keep track of vehicles and unidentified citizen in your properties, and be up front with your existing tenants what your policies are to bring new citizen into the unit.
5. Noise Violation:
Loud music and screaming tenants can annoy your other paying customers in a multi-unit building. In a neighborhood where your unit or house is one among many it can rouse bad sentiment among other resident homeowners or landlords who own rental properties. No one likes when loud annoyances shatter the night, or prompt neighbors to bring in the police. The best way to deal with this situation is to call them on it and if they do not respond to your call, get the authorities involved. There are many regulations that the government has put in place to stop noise violations. Again, your lease bargain should cover this area. Be respectful, but be firm. After all, you have money tied up in an venture that loses perceived value when those types of goings-on are prevalent.
5.5 Bad Management:
Many investors suffer because they do not have an efficient property manager. If you are the problem, don't let your pride keep you from prosperous in real estate. Just interview pro property supervision companies in your area and make sure they cover all and more of these topics. The number one thing I would recommend you do when you sit with a employer is have them give you a copy of the bargain they use and have your attorney read straight through it. For example, when we invest in bulk properties- whether they be residential or commercial- we like to already have a solid employer signed up to perfect the task that is ahead. Should you do the same?
If you just apply these few theory I can assure you that you will save thousands of dollars in mistakes and you will be re-positioned to growth your monthly returns. So keep construction your long-term wealth and stay associated for more resources.
property management Tips - Top 5.5 Tenant Problems and How We Fix Them