What Every Landlord Needs to Know: Time and Money-Saving Solutions to Your Most Annoying Problems

Chapter 1

Selecting High-Quality Tenants

Marketing Your Product

The key to a successful and profitable real estate investment business is selecting the best tenants possible. And one of the key elements in selecting and attracting the best tenants is to market your rental unit so the ideal tenants like what they see. As you begin the search for the best tenants, the number-one concern for you should be this: Start with what you have to offer. In other words, get your house in order.

Solution

Here’s a 10-Step Program on How to Get Your House in Order

Step Number 1: At all times, before making arrangements to show the rental unit to a potential tenant, take the time to thoroughly scrutinize the rental unit yourself. Look it over. Ask yourself, Is this a place where I’d consider living?

As they inspect the apartment, most people will be looking for obvious deficiencies. They want to know if the various utilities, stove, refrigerator, dishwasher, and hot water heater are in good working order. The good tenants you’re seeking aren’t dumb, so you can be assured that they are going to be very observant of whether the unit is clean.

As you go through your building, check the basement. Make sure it’s not full of leftover junk from previous tenants. I’ve gone into some basements and found a collection of clutter consisting of old mattresses, davenports, chairs, and many other items.

Once you’ve completed your inspection and you’re ready for the showing, go through the unit and review your property and ask yourself, Am I satisfied that everything is in tip-top shape and ready to show?

Step Number 2: Check the fire extinguishers, smoke detectors, and smoke alarms. I highlight and magnify this item, fire-related equipment, because of its importance. Make sure that all of the fire safety equipment is in proper working order.

Here’s something many landlords overlook. Smoke detectors and smoke alarms have a limited life span. If you have any question about the length of time they’ve been in your unit, don’t hesitate to buy and install new fire and safety equipment at regular intervals. It’s inexpensive insurance.

Periodically ask the tenant to check and make sure the smoke alarm and fire extinguisher are working and in proper order. If you have a feeling that the tenant might not do this, then take it upon yourself to check them.

In fact, I’d make it a point to personally take the time to inspect the fire extinguisher. There’s an indicator that shows if it’s in proper working order and whether it is fully charged. If it’s not at full charge, have it recharged.

If the fire extinguisher is located inside of a cabinet or cupboard, purchase a red warning sticker that says FIRE EXTHIN-GUSHER INSIDE. Place this sticker on the outside of the cupboard door.

I don’t think it’s a sound idea to buy and install the least expensive fire prevention equipment. If a fire should occur, and it’s discovered that you installed a cheap fire alarm or detector, an attorney will focus on this detail and might be able to use it against you.

If your building has natural gas heat and gas appliances, stove, and gas dryer, install a carbon monoxide detector. As with your fire protection equipment, this also can be inexpensive insurance. Here’s a case to illustrate why you must have all this equipment working properly and in first-class condition.

My friend, the owner of a sixplex, rented one of the units to a single working woman. She checked out well in the application for rent and the credit report. One evening she returned to her apartment and started preparing her meal on an electric stove. She left the kitchen, went into the living room to watch the news, and fell asleep. The stove burner remained on while the food was cooking; well, let’s say it overcooked. Eventually, with no one watching, something ignited and started a fire. The smoke awakened her. As she woke up, she discovered flames in the cooking pan and all over the burner.

She didn’t have a working fire extinguisher available, so, in a state of panic, she quickly grabbed the food pan by the hand and put it in the sink, ran water over it and put out the flame. By then the kitchen was filled with smoke. She called the fire department and fortunately they used a chemical rather than water to douse the flame. After everything was doused there was considerable smoke damage throughout the apartment. This included burned and scorched woodwork around the countertop, and the stove itself was ruined.

My friend, the owner of the building, filed a claim with his insurance company. There was no problem with the claim, and basically few questions were asked by the adjustor. The insurance company covered the fire loss in the apartment.

But what made this an unusual story was that as she picked up the pan that she put it in the sink, she suffered severe burns to her hands. She went to the hospital for treatment, and the cost was $500. Even though she was completely at fault, the landlord’s insurance company paid the $500 hospital bill.

The owner was out a couple of months’ rent because the fire damage throughout the apartment rendered it unusable, because it needed a considerable amount of repair and replacement. He, unfortunately, didn’t have insurance coverage for the rent loss.

The landlord asked his insurance adjuster about the $500 hospital bill, Why should we be responsible for her carelessness? The adjuster simply said, It’s less expensive to pay this small claim rather than getting involved with any legal action. He said, Once an attorney enters the picture, the cost doubles and triples, and you never know what we could end up with, loss of work time, psychological trauma, inability to have children. Who knows what all?"

I’m sure there are hundreds of stories about fires that occurred when the smoke detectors, fire alarms, or fire extinguishers didn’t work or weren’t available. Therefore, do whatever it takes and everything within your means to keep that property from being vulnerable to any kind of lawsuit.

Step Number 3: The next important inspection should be the kitchen. Check the floors, window coverings, curtains, blinds, or drapes for stains, dirt, and grease. Make sure the refrigerator is clean and in prime condition. Does the dishwasher smell from the previous tenant’s use, and is it clean?

Are the stove and air vents clean? Are there cracks and crevices on the stove filled with cooking grease from the previous tenant?

How are the kitchen cupboards? Think of this. Tenants are placing all of their personal eating utensils, probably a lot of them wedding gifts, into that cupboard. I’m sure you can understand that no one wants to see dirt, spider webs, or, worse than anything, mouse droppings in the cupboards.

The kitchen and bathroom are two prime areas that you want to present to the new tenant as being meticulously clean.

Step Number 4. How does the all-important bathroom look? Would you have second thoughts about using the bathroom if you lived there? If so, correct whatever you observe, smell, or find objectionable. Is it clean? Does it smell good? Is the shower or bathtub clean? A new toilet seat is a simple and inexpensive improvement. There’s nothing that will turn off anyone more than an ugly, cracked, or dirty toilet seat. Put in a new roll of toilet paper.

Step Number 5: Don’t hesitate to use a good-smelling soap or cleaning agent. If the unit smells fresh and clean, it’s to your benefit. Maybe it’s best to avoid Lysol. Another smell that is distasteful is roach spray.

Step Number 6: Are any of the rooms in need of painting? Are the carpets clean?

Step Number 7: The entire unit should be in tip-top shape. If it’s not, the odds are pretty good that you’re going to have a crummy-looking rental unit and you’re going to end up with a crummy tenant. It’s that simple.

Step Number 8: Everything should be in excellent condition so that when you’re showing, you won’t be embarrassed or have to make excuses or apologize about dirt or clutter, or whatever that can be distracting in the eyes of that potential tenant. Make certain that you never get branded as a slum landlord.

Step Number 9: Now you should be ready for the all-important showing. If you know and feel that your unit is ready, make sure you accompany the potential tenant.

Step Number 10: Allow the tenants to have a private look on their own. Once the one-on-one showing is completed, here’s an idea I’ve used that has worked wonderfully well for me.

Once I’ve determined that this potential tenant is a good choice, and I like what I see, I make a mental commitment. When I’ve finished the tour of the premises with the tenants, I tell them, I’m going to leave you now and you can spend some time in the apartment. This will be your home and I want to be sure you’re satisfied. By spending a little time alone here, this can give you an idea of what kind of a home you can make for yourself.

I then add, I’ll be back in about a half-hour and then you can give me your decision.

On the other hand, if I have any sense that that individual just doesn’t click with me, I rush through the showing and say, I’ll get back to you because I have others who are waiting to see the unit. As soon as the showing is over, I’ll call you. I always have a backup with someone to call once this interview is concluded. That usually ends it.

Now let’s see who those renters are that are considered the best.

Chapter 2

Finding the Ideal Tenant

Who Are the Best Tenants?

If you select only the best tenants, you will eliminate many other problems. This can include general upkeep of the rental unit, receiving rent on time, and just plain getting along well with the tenant. In other words establishing a good tenant-landlord relationship.

You probably already know this, but it bears repeating. There are some people who, for one reason or another, simply don’t care to own their home. I suspect these people prefer living in an apartment or a rental unit so they don’t have to be bothered with mowing the grass, shoveling snow in the winter months, or tending to the various maintenance issues with home ownership. And a renter has no mortgage payment. Those of us who are homeowners can certainly understand that.

And, of course, there are some people who simply can’t afford to own a home. That means there are and always will be certain numbers of people who are available to rent an apartment. How do we find those people and make sure we get the right ones?

I’ve got to admit it’s fairly easy for me to say, select only the best tenants. Everyone would like to do that. But that job, as a landlord, is not as simple as it might sound. I’m thoroughly convinced that it takes time and work to select the best. And let me add, the more screening you do, the better the tenant.

Just as important, make sure you don’t end up with an undesirable tenant. We’ll discuss the undesirable tenants and what this can lead to more thoroughly as we go through this text.

I know some landlords who just don’t take the time, and they often end up with the slugs. That, of course, is their business. I say, Let them have the ‘questionable’ tenants.

Profile of the Ideal Tenant

From my years of experience in the rental business, I’ve been able to compose a list of individuals or couples that I consider very acceptable and desirable as tenants. However, don’t totally rely on this list as your final decision. Depend more on the application for rent or lease, your personal interview, and that all-important credit report.

There is no secret list of good, better, or best tenants that I know of. I’m not sure that my list is adequate, and I know it’s not complete. But at least it’s a guide that can be a starter for you to consider as a potential investor or present landlord.

Now, let’s get on with finding a list of potential best tenants.

Professional and Semiprofessional Medical Service People

I personally have always had good experience and have rated high on my list the following:

• Licensed practical nurses

• Registered nurses

• X-ray technicians

• Medical technicians

• Most health care personnel

On a couple of occasions I’ve had the opportunity to rent to a doctor (intern) who lived in our community. Most interns are single and look for a single-person apartment. This is usually good for, at the most, one or sometimes two years. As we all know, by the time the interns become full-fledged doctors, they can afford their own home, so the odds of getting a full-fledged doctor as a full-time tenant are minimal.

Educated, Intelligent, Considerate People

Most people working in the medical profession are fairly well educated and intelligent enough to understand that when they live in an apartment complex, they must be considerate of the other people living in the same building. The nice thing about this group is that almost all medical people make a decent salary, so they can easily afford the rent.

In general I can say, in my case, that they have always been neat and clean and take good care of their living quarters. When their lease is expired the apartment is left in usually good condition, and that means it doesn’t take a great deal of cleaning and preparing for the next tenant. You can, naturally, expect some wear and tear, so it’s not out of the question that you might have to do some work, but there shouldn’t be any major overhauling.

Usually most of the above-mentioned tenants are single. Consequently they entertain conservatively. That’s not to say you want to overlook married couples. By all means, they can also be A-1 tenants.

With this category of people, I’ve found that you most likely won’t experience or deal with loud parties, loud music, or wild guests. These are irritants that you don’t want to handle.

College Professors, College Staff Members, High-School Teachers

• Administrators and assistants

• Faculty members

• Clerks, office workers

• Food service personnel

• Teachers

Most educators are paid a good salary so they too can afford the rent. And as with medical professionals, college-educated people are sophisticated and know enough to realize that they live in an apartment environment.

However, there’s one minor glitch for you to consider. Some highly educated people can sometimes become overbearing when it comes to demands or complaints. Some seem to have a tendency to see every little glitch or scar or problem in their living quarters or in the building. There often can be a multitude of complaints, such as the faucet leaks, the washer doesn’t wash the clothing properly, the dryer doesn’t dry, the refrigerator is too cold or not cold enough, or any other small problem. Most of the time they become insistent, and whenever they find a problem, they become demanding and require that whatever it is be taken care of right away.

Incidentally, here’s a good time to tell you by all means put in coin-operated laundry equipment. The main complaint you’ll receive regarding the washers and dryers is that the tenants overload them. They think they can save money.

Most landlords realize that these types of complaints are part of the life of a landlord, and live with it. In my opinion, if it’s a good tenant, take care of the problem as quickly as possible. This will not only establish a good rapport with the tenant, but also it will enhance your reputation as a landlord. The word gets out, especially in smaller communities. Having a good reputation is a great referral system. You’ll like to hear, She’s a good landlord and takes good care of her buildings and tenants.

Mature Single or Married People

• Mature elderly tenants

• Retirees

• Widows, widowers

I’ve always had great experience renting to and providing housing for mature older tenants. Here’s a case in point. A middle-aged divorced woman moved into our community to be close to her children and grandchildren. She rented my apartment, where she remained as a top-notch tenant for nine years. I rarely had a complaint. She took care of everything, kept it cleaned, and fixed or had fixed whatever needed fixing. She installed and paid for new carpeting in her living room. The rent was paid the first of the month without question.

Do you know something? I only raised her rent one time in nine years, and in the long run I made more money from not raising the rent and not having to deal with vacancies for nine years. She was what I would call an A-l tenant.

Also, some good tenants are retirees, older widows, and widowers who no longer want to take care of a personal home. I’ve found that usually, if they’re satisfied with the management of the building and you take care of them, they remain in the apartment until they are forced