Tips For Landlords

 Lately, I have had a very fun time interviewing perspective tenants. The most important part of the interview is finding out the truth behind people's stories to determine the risk associated with renting to them. 

If you are trying to fill a vacancy in a rental unit, here are some points of advise that I find useful:

1.  PRE-PAID RENT: Although this sounds great to a landlords ears, it may come with more than you asked for.  I recently had a perspective tenant ask me if he could discount the rent if he paid 6 months at a time.  Since I had three other showings scheduled, I told him no.  The question you need to ask yourself is: Why would someone part with a large chunk of their cash when it is not necessary to do so?  What is motivating them to do that?  Later, he asked if he could sublease a room to a tenant.  I told him no and he could only get a roommate if they applied with me and passed our rental guidelines.  Finally, it came out that he was a recently convicted felon which of course was just "a big misunderstanding".  Beware of tenants that don't own their mistakes.  They will make you the owner of them. 

2.  SUBLETTING: In my opinion this is a big no-no.  If you want to loose control of your building, this is a very fast way to do it.  It's best to include anyone who wants to move into the building on the lease, or at least add them to the lease.

3.  PETS: I hate pets...sorry pet lovers.  If you are going to allow pets the rule of thumb is the bigger the pet, the bigger the potential damage to your property.  Labradors have big bladders.  Great Danes have big claws.  Big dogs leave big poop.  Cats mark their environment. Keep in mind that every tenants' pet is "a very well behaved" pet.  Unfortunately, the good ones look just like the bad ones.  So, my rule of thumb is no pets.  The less money your tenant spends on pet food and pet trinkets, the more money they have to pay the rent on time.  It also saves your rental from significant damage.

4.  SMOKE:  See The Case for Smoke Free Rentals.

5.  INCOME:  There is an almost universal rule of human existence that shows that people will spend 1/3rd of their income to provide a house for themselves to live in.  Given the other costs of living like a car, insurance, food, ect. this rule has been consistent for at least the last century.  For this reason, I make it a rental criteria rule to only rent to folks who make three times my monthly rent.  For instance, if my rent is $650, the tenant would need to earn $1950 per month to qualify.  The problems that arise when you go below this three-times threshold is that people start having difficulty paying the rent when the car breaks down or work is missed due to illness.  There is basically no buffer room for them.  For this reason, for folks with income deficiency, I will often ask for a co-signer to make up the difference.  That has been a winning scenario. 

These are just a few pointers that should help you lease your property.  More stories to come for sure...