How to Attract and Keep Good Tenants
Monday Dec 11th, 2017
Probably the main thing that stops potential real estate investors from buying rental properties is the fear of getting a bad tenant. I know there are bad tenants out there but it’s my firm belief (and my experience) that taking some fairly easy and straightforward steps can prevent most cases of bad tenantitis!
DRESS YOUR PROPERTY FOR SUCCESS
Your property will attract the level of tenant it deserves. If your property is dirty and in a state of disrepair it will attract tenants who don’t mind living in dirt and disrepair. On the other hand if you maintain your property well and keep it clean and updated it will attract tenants who want to live in a nice place and will take care of the property going forward.
RESPOND TO REPAIR REQUESTS QUICKLY
I don’t find it a bother when a tenant calls when things are broken or not working properly. I would much rather know about the problem now rather than later when more damage could be caused. An added bonus, while you are doing the repairs, it gives you a chance to inspect the property to ensure the tenants are maintaining it well.
PRICE YOUR PROPERTY PROPERLY
I have heard some experts say to price the property above market value to attract better tenants. I don’t agree with this strategy. It’s my real estate sales background that tells me to price a rental slightly below market value. This will bring the most interest from potential tenants and allows the landlord to be picky about the tenant they choose. I’ve seen many cases over the years where the landlord has priced the rental too high and then gets desperate because there is little or no interest in their property. Going forward I raise the rent using the guidelines provided by the Ontario government – obviously I want to maximize my return but I want the rent to remain close to market value so my tenant feels they are not getting ripped off.
MARKET THE PROPERTY PROFESSIONALLY
When it comes to advertising a rental property, I treat the property as if we were selling them. We take plenty of high quality pictures and spend time and energy constructing our ads. We list our properties on the local Multiple Listing System (MLS©), our own websites and our brokerage’s websites. We highlight the features and benefits of the property, local schools, amenities, etc., aimed at attracting the type of tenants we want in the property.
DO YOUR DUE DILLIGENCE BEFORE ACCEPTING TENANTS
I think my instincts are pretty good but I don’t go by my guy alone when choosing tenants. I put prospective tenants through an application process which includes employment verification, credit check and reference checks from previous landlords and personal references. I also cross-check information from the credit report with information on their rental application and information in public records to help ensure their story checks out. Red flags go up when I see dates, addresses, employers, etc that don’t coincide with each other. Lastly, I always meet the prospective tenant before signing the lease and I recommend all my landlord clients do the same. When choosing tenants for your property it is better to err on the side of caution.
Once you have a good tenant in place you should remember that your tenants are maintaining and helping to pay for one the best investments you can have. A happy tenant who feels appreciated will stay longer and take better care of your property which, over the long run, will make your job easier and your investment more successful.