Landlords that get creative are landlords that keep tenants and make more money!
Being a landlord is hardly all sitting down and raking in profits because you’re nice enough to let someone else live in your house — there’s a lot of work involved! Keeping your tenants in your properties and paying on time are two of the most important keys to staying profitable. Here are four clever tricks to make those two jobs easier.
There are lots of ways to offer move-in specials to a new tenant, but a lot of property managers fall back on the old “Get x months free/discounted” route. Unfortunately, that can attract the wrong kind of tenants – those that are tight on money! If, on the other hand, you offer your prospects something that they can use and will add to the home’s value even after they leave — say, ceiling fans, a washer/dryer, a small kitchen appliance, etc. — you win twice. Once when they move in, and once when the next tenant sees the improvement as a natural part of the home’s value.
In fact, you can win three times with this trick — if you make the special contingent upon the tenant signing a 2- or 3-year lease. That way, they get the added value right away, you get the added value in the long term, and you create a (hopefully) reliable and stable tenant in the same fell swoop.
Offer a Grace Period, but ONLY if it’s Revocable
Your rent payments should come in on the day they’re due — but there are always circumstances that keep people from paying on time. Offering a grace period (we suggest no more than five days) is a nice way to allow for life’s inevitable challenges. Just be certain that your lease agreement specifies that the grace period is revocable. Otherwise, the realistic due date is at the end of the grace period (we learned this the hard way). So, if someone consistently pays on the last day of the grace period, you can revoke it due to abuse and charge late fees immediately. We suggest giving them a warning in writing and even reinstating the grace period if they pay on time to 4-6 consecutive months.
Record Every Critical Interaction You Have With Your Tenants
We’re not advocating having a voice recorder on you when you enter their home — that’s may be illegal without their consent. We do recommend having a method of tracking every call and what was discussed of importance. The best and most cost effective method we’ve found is using Google Voice.
Ever have an irate tenant try to get the upper hand with you by claiming they’ve called numerous times without a response? Google Voice allows you track all incoming and outbound calls so you can pull the rug right out from under this tactic! Wish you had a recording of that tenant’s threats to trash your property if you evict them? Google Voice allows you to record any conversation by pressing “4″ anytime during the call and it announces the call is being recorded to comply with most state’s laws.
Lastly, what happens if you text a tenant an agreement about a charge against their security deposit and then they take you to court over it? We cringe every time we hear about landlords communicating solely by text messaging with tenants. It usually takes a court order to get a copy of texts making it very difficult to hold others accountable. Google Voice allows you to send & receive text messages via a Google Voice number and saves a record of them.
It’s a huge resource to be able to rely on when you get into tenant said/landlord said arguments — especially if those arguments make it to court.
Offer “Renewal Gifts” To Tenants 60 Days Before Their Lease Expires
Remember that list of potential move-in gifts you were making in your head a few paragraphs ago? Whip it back out, because a couple of months before a tenant’s lease expires is when they’re asking themselves what they’re going to do next. If they’ve been good tenants, you can and should do whatever you can to get them to stay. If you can offer them another value-added ‘gift’ that you’ll get to keep when they leave, do it! You’ll save a ton of time and money by not having to seek out a new tenant.
Let us know what other ideas you use to make landlording a bit easier and a bit more profitable!