Entering the world of real estate investing as a landlord is not everything it is cracked up to be. For every success story, there is an equal amount of stories regarding tenant incompetence. Not paying the rent on time or at all is certainly a bad scenario. While this is unfortunate, there are plenty of other things a tenant can do to devalue your property or force money to hemorrhage from your budget. It is up to you to make sure they know what they can and can’t do.
The first rule of thumb as a landlord is to assume that your tenant knows nothing. Depending on where the property is and who your target tenants are, this may be their first time renting. Even if it is not, they may have come from a situation where the rules were a little less strict. Before your tenant signs the lease, you need to spend the time and go through it line by line. Even if you think that you are putting too much information on the lease and that many of the items are common sense, it is best to keep them on so there is no misunderstanding down the road.
Seemingly common sense items like flushing things down the toilet, getting a satellite dish or grilling inside the house must be explained and included in your lease. You may laugh, but believe it or not, all of those things happen with tenants from time to time. This is not even including damage to furniture, knocking down walls, candles in the house and emergencies. The more detailed you are in the ground rules of the property, the less likely they will be to do them.
Like any other situation, you need to pick and choose your battles. If you make every rule the one rule that absolutely cannot be broken, nothing stands out as a priority. Smoking, pets, parking rules and noise restrictions should be the items that you place at the top. Attach a punishment for each of these items. It is not an exaggeration to say that if there is smoking in the property they will be evicted. Accordingly, it is wrong to evict someone for parking in the wrong spot.
Most tenants will respect your property, but they will not make it a priority to keep it pristine because it is not theirs. This may lead them to do questionable things if the opportunity presents itself. This is where the communication you had with your tenant before they moved in becomes so important. If you are holding a deposit and clearly define what the actions are, it will cause them to think twice before they jeopardize their deposit.
Dealing with tenants is usually as easy or as difficult as you make it. If you are up front with them on what their expectations are and what the consequences are for their actions, you will have a much better experience. Not every tenant will follow the rules, but if you assume they know nothing and go from there, you will have a much better chance of having a better tenant.