Many companies today use quality control methods to reduce mistakes and errors in their manufacturing processes. Reducing mistakes helps lower costs, improve customer trust and grow profits. Having the right methods when dealing with rental properties helps lower costs, keep tenants, and grow rental profits. This article discusses the top 3 mistakes landlords make with their properties. Learn about best tenant screening practices, tenancy agreement, handling partial rent, importance of tenancy law, and landlord maintenance expectations.
“The only man who never makes a mistake is the man who never does anything’ – Theodore Roosevelt
Poor rental tenant screening
Nothing costs more than accepting a new tenant without screening them first.
An undesirable tenant is easy to spot. They often have a poor rental and financial history. Landlords should speak with a tenant applicant’s previous landlord if possible and review credit reports, courthouse records and income. If an applicant does not have a good track record with previous landlords, they are likely to repeat their behavior with new landlords.
Many landlords have faced horrific situations where tenants have stopped paying rent while employing legal maneuvering to avoid eviction. Landlords all over the country experienced this first hand during the COVID-19 pandemic and eviction moratoriums. Others have faced tenants who moved in and initiated criminal activity. These scenarios threaten the financial stability of the landlord and the property in addition to any headaches and mental anguish.
A thorough tenant screen is your front line of defense against undesirable tenants. The best tenant screening involves verifying that the person applying is the same person that submits credit/criminal info needed for screening. First, a picture I.D. should be cross-referenced with the application. Take a look at these suggested steps. Make sure that there are no omissions, inaccuracies or inconsistencies in the application submission. Due diligence saves money and stress.
Generic rental lease agreement
A basic tenancy agreement is a contract between a tenant and landlord that gives a tenant the right to live in a property for a fixed period of time in exchange for payment. It is a legal document that binds both the tenant and the landlord. The document protects rights and governs conflict resolution, financial responsibility and terms of execution. Without a properly prepared lease, the landlord stands to forfeit many of the rights given to property owners by law. The best lease agreement for a landlord protects them and their property and not the other way around. Many generic leases protect the tenant more than the landlord. Therefore, it’s best to customize a generic lease or have one professionally prepared. A landlord should always have a written agreement. A verbal agreement can be falsely interpreted and may not offer the full legal protection.
Landlord rent collection
As stated in the previous section, the lease agreement is a legal document that governs financial responsibility. That responsibility includes how tenants should pay and how landlords should enforce timely payment. The agreement should make the tenant fully aware of the consequences of not paying rent on time including fees. If not enforced, the landlord runs the risk of creating a precedent that allows the tenant to believe that a late rent payment is acceptable.
In the event of a non paying tenant, legal notices and follow up action must be taken as soon as the law permits. Landlords should hesitate to accept partial payments. Courts may interpret receiving partial rent payments as an acceptance of terms by the landlord. The eviction process is subsequently terminated for that rental period while the landlord continues to lose rental income. In some jurisdictions, a landlord has the right to proceed with an eviction as long as the tenant is sent a written notice that partial rent is accepted while reserving the right to take possession of the property.
If a tenant has had a poor history of paying rent on time, a landlord should consider not renewing the lease for another term. Late payments could be a symptom of a bigger problem that could create continuing rental income instability for the landlord.
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