10 Ways to Get a Bad Tenant to Turn Good
“I tried to add up all the hours I worked on my properties but gave up after six and I was only talking about my renovation.”
I get these thoughts often since I am certainly not quiet regarding my self-management or Empire Building status. Even though I hear those thought often they still make me giggle every time. While self management has had its ulcer-inducing moments, over the years I have learned 10 tricks to make doing it myself (DIY) self management to be much less work. While nothing is quite as passive as hiring an amazing property manager (remember they are not all made equal), since I get two calls (repair man/tenant) to their one (property manager) it has become passive enough that doing it myself is still worth the savings.
1 Clear Concise Contract To Prevent Unneeded Stress – In the beginning one of the worst parts of landlording was everything felt like a debate or a discussion with my tenants. I was always getting a text that said, “Do you have a moment? I want to discuss something with you and find a solution that works for both of us.” I hate this comment as it was code for “lets renegotiate” or “I want to get out of my obligations”. Plus it was never in my benefit (if its not in your lease spelled out or not local or state law you have no recourse)! So I ended that, quickly. I create a 16 page plus page lease and covered everything. Now on the off chance something comes up that isn’t covered I handle it and than I add to it for the next renewal or tenants (you can’t change a binding contract while tenants are currently in place). After that there was no more discussion, mostly no more phone calls. Now it all said see your lease. 3 hour discussions have become 5 min.
2 Institute Penalties – The next important key was to have penalties in my lease for violations. I was always told that without spelled out penalties in the lease, there was nothing you could do when your lease was violated excepted evict. Which the tenant knew was an empty threat. Are you really going to evict because the lawn wasn’t mowed? So I ended up having a tenant who I had to either evict or put up with. Now I have a third option, I charge them a fee for violating (think traffic ticket) and they continue on occupancy.
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3 Charge Your Tenant For Your Time – Your time is worth money. One of the most important messages I have learned is not to undervalue yourself. I have starting instituting a handling fee for having to organize carpet cleaning, vent cleaning, landscaping, filter changes, etc at the end of the tenancy. This was started after too many tenants saying, just take it out of my security despot. So now I have to handle things that should have been their responsibility so they are paying me for it, since my time is worth money.
4 Hold Their Feet to the Fire – I do not put up with ANYTHING from my tenants that violate my lease. I always equate it to the parents with rules/expectations have the well behaved kids. Once I created a 16 page lease that had all of my expectations AND held my tenant’s feet to the fire, self-management got pretty easy. Most of my tenant management problems went away. Even now the only time I have regrettable tenant interactions were due to not following my own advice and being nice. I have also found that people respect you for holding their feet the fire.
5 Repairs – I have a policy of my tenants being responsible for the first $100 of any repair. While I wasn’t a believer at first, regarding the repair deductibles, I am now. While this hasn’t prevented any of my tenants from reporting a valid repair, it has reduced the silly ones, like the broken refrigerator call due to not understanding what an ice-maker sounds like. It also puts skin in their game for them to treat the appliances like one should. For example using the trash can and not the garbage disposal.
6 Handy Man – While we do some large repairs in our rentals (check out our Tip that we learned from doing our Tile Shower Project) day to day repairs go straight to the handy man. We text so its super easy and totally worth not having to do the in and out repairs.
7 Day to Day Maintenance – We have a specific section in our lease that goes over their expectations regarding filter, batteries on the thermostat, smoke alarms, etc. That is not our responsibility and the occasional time we get called over an issue like that, it goes right back to the tenant.
8 Create Efficiency Systems – I have my tenants text not call as much as possible because I can multi task with text much better. It is easier to answer a tenant request while at the vet or on the go. I keep old paperwork and reuse the same wording over and over again. Once I find a system that works amazing, I do it over and over again.
9 Lower Rent for Quicker Tenant Installation – This is the biggest time consuming part personally. Personally, the reason it is time consuming is because I try to max out my rental price. Instead of going for a number I know will rent out within a day, I go for the top market. Meaning more showing, messing with the rents, and tenants who are trying to shop around. On the other hand, if I really want it to be easy, I go a little below market so it’s a deal. It is gone instantly with one showing or maybe even a site unseen tenant and no more issues.
10 Move Out – In my lease I have gone into great detail on what I will charge and expect on move out. I have fewer issues because it is all laid out. Steam Cleaning, Vent Cleaning, Housekeeping, Pet Damage, etc. This way if any of those items are needed, I am not thinking about it. I simply write the letter referring back to the offending items.
As a self manager I have learned there are no guarantees or promises. No matter how great my lease is I anticipate always having challenging moments. My goal is simply to reduce as much as the unnecessary stress as possible.
What are your tips to making self-management as easy as possible?
Bio: Elizabeth is an entrepreneur who is turning her love of rental properties into a work-from-home positions that she self manages anywhere in the world. Follow her at Reluctant Landlord. Looking for a jump start to writing your perfect lease? Check out her book, The Everything Lease Addendum: How To for Landlords. It includes all 37 addenda with wordings and the explanations. Elizabeth hopes her passion for turning her ulcer inducing moments into a solid lease helps you learn these lessons vicariously and not through the trials and pains she experienced.