If you want to make the most money for the least hassle, keep your tenants happy. That means putting a lot of work in when tenants first move in. That might sound like an oxymoron but it’s not.
If you’re depending on rental properties to provide you with a retirement income, your tenants are some of the most important people in your life. It doesn’t work every time but being respectful to your tenants will be more profitable almost every time. First and foremost, treating tenants well keeps them in the property longer. It costs you time and money every time you have a turn over. Typically, the equivalent of a month’s rent. Even if you have a new tenant ready to move in the next day.
Even if it doesn’t cost you out of pocket cash, it still costs you time and work. You have to advertise, take phone calls, meet and interview potential tenants, show the property, pull and analyze credit reports, discuss the lease, record inspections on move in day, and more. It’s a lot of work.
There are some basics you need to do to avoid angry tenants, keep tenants in your rentals long term, maintain your cash flow, and even allow you to charge higher than average rents.
- Always keep your properties well maintained. You can’t charge top rent for a rental in need of repairs.
- Go over the lease with each new tenant to be sure there is a common understanding of the expectations.
- Keep rent increases small. Instead of waiting four years to hit them with a 12% increase, raise the rent 2% to 3% each year to match inflation.
- Strongly consider your tenants requests. Maybe they want to put in a small garden in the back yard but you’re concerned that after they leave, the next tenant won’t maintain it. You could agree to the garden but require a fee to cover removing it if they don’t take it out when they leave. Also, add the requirement to remove it to the lease.
- Compensate them when there are problems that cause them a hassle. If the hot water heater is out for three days, take $30 off the rent for the next month.
- Do something extra for them. If they pay the rent on time for six straight months, give them a gift card for the movies or a pizza dinner.
Showing respect to tenants and quickly taking care of their needs in not the norm in landlord-tenant relationships. They will appreciate it and be hesitant to move to another place where they know the relationship is likely to be more confrontational.
Put Yourself in Your Tenants Shoes
The number one rule to keeping long term tenants in place is you thinking like a tenant. If your state law allows, put a clause in the lease for you to inspect the property once a year. Schedule the inspection at your tenant’s convenience. Use the opportunity to make repairs no matter how small. A leaking faucet might seem trivial to you but it might be keeping your tenant awake at night. Fix it.
Keep the lines of communication open with your tenants. Don’t call them up once every two weeks asking if everything is okay. But do make it clear that they can call you with questions and problems. When they do, respond quickly. You certainly don’t have to concede to unreasonable requests but you should look for compromises.
Remember, it might be your retirement income but it’s also their home. By finding the best tenants and treating them well, your rental property will be better maintained and you’ll have less hassle in the long term.
Author bio: Brian Kline has been investing in real estate for more than 30 years and writing about real estate investing for seven years. He also draws upon 25 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest in the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.