A Few Tips for Leasing Your Property

Having owned my own rental properties and having helped many clients rent theirs, I have had some experiences and suggestions that I’d like to share.  A few years back I was screening a tenant for a client who had a lot of investment property.  When I ran the credit report, I discovered that the prospective renter had no credit at all, which surprised me because he was in his forties and was not a foreign national or anything.  I told the landlord, “Al, I don’t think you should rent to this person because having no credit is as bad as having bad credit.”  He said the tenant was in the carpet business and he was going to re-carpet the unit at no cost.  He rented the unit out to the man and his family; they did pay the rent, but guess what?  The carpet he installed was a horrible bright blue color and when they moved out, the landlord had to replace it.  The moral to this story is when a tenant tries to con you, he is probably not the right person to rent your place and also, it is unwise to rent to someone who has no credit.

Another experience was with my own property.  My husband was in charge of making repairs and interfacing with the tenant.  One day when he was over fixing something, the tenant apologized for the stains on the carpet.  My husband said, “Don’t worry about the carpet.  We’re going to replace it when you move out.”  When we went to do the inspection of the property when the tenant was moving out, the carpet was filthy.  I was furious at my husband but mostly at the tenant who said, “So I spilled a cup of tea, so sue me.”  I said to her, “Did you spill a cup of tea all over the condo?”  She said, “Your husband said it was okay because you are replacing it anyway.”  The moral of this story is don’t ever say the condition of the property does not matter; it does.  We found numerous other problems as well but luckily we had enough deposit money to cover most of the damage.  My advice is to always require a security deposit that is two times the amount of the rent or the maximum that is legal in your state.  That way, if they don’t pay the rent and damage the property as well, you might have enough to make repairs.

Speaking of rent, I used to think that putting a late fee of 6% of the rent was a good idea, but now I’m leaning toward not requiring a late fee.  That way, if the rent is not paid when due, the tenant knows they can be served with a 3- day-pay-or-quit notice the day after the rent is due.  Whether there is a late fee or not, always call the tenant if you do not receive the rent on the due date.  That way he will know you care about receiving it on time.  (Many tenants, unfortunately, think landlords are rich.)

If you say you do not allow pets and you become aware of their having a pet, immediately serve the tenant with a 3-day-notice-to-perform-covenant-or quit.  I like pets and I have two cats, but frankly, I do not know how well other people take care of theirs.  If the rental market is decent I would not accept a tenant with pets.

I recommend using caution when renting to a tenant who tries to pressure you into making a decision before you are able to investigate his credit.  I have heard things like, “I’ll pay you an extra $200 a month if I can move in tomorrow.”  It is tempting but always do the proper screening or you may be sorry.

I have shown some properties listed for lease on our Multiple Listing Service that have been left wide open with an open house sign and their is no one hosting the open house.  This could be perilous, because I have been told by my attorney that if a person squats in the property, it may take years to eject him.   My advice is to never leave access to a property when you or your agent is not present.

Another tip is do not get too chummy with tenant.  Renting your property to another is a business transaction and it should stay that way.  It is easier to not pay rent on time or damage a property if you think the landlord is such a good “friend” that he won’t do anything about it.

I want to add that I have had many, many good experiences with tenants and that most treat the property with respect and pay their rent on time.  I recommend working with a good real estate agent who has the connections to rent the property in a short period of time and who can stay at arm’s length and make decisions based on facts rather than emotions.

Real estate is the best!  What other investment can you live in?