Top 10 Tenancy Tips
1) Know your legal rights and responsibilities as a residential landlord.
Knowledge of the law and how it affects you as a landlord is the single most important factor for being successful. Your tenant should not know more about your investment than you. Good landlords will get good tenants; bad landlords will get (and, unfortunately, deserve) bad tenants. (You would not open up a restaurant if you did not know how to cook.)
2) Treat your properties like a business.
Set a formal, business-like tone with your tenant from the very start. Your rental property is an important investment for you, and your tenant must realize that you will treat it as such. There is no substitute for the written record. Communicate with your tenant in writing, even if it is email, and even to merely confirm a verbal conversation. Use Forms- and use the right forms. If you decide on a tenancy-at-will, reduce your agreement to writing and include lawful terms that are favorable to you and your specific situation. Use, incorporate into the tenancy agreement, and post the rules and regulations of the property for tighter control. Good tenants will welcome your rules and regulations. Don’t use store-bought or internet forms. To document your intention of entering the unit (i.e. to inspect, make repairs, or to show the unit to a prospective tenant or purchaser)- always send or deliver notice at least 24 hours before going in and keep a copy for yourself. If the situation is contentious- bring a neutral third party witness, such as an off-duty police officer.
3) Document the Property’s Condition at the Outset.
Invest the time and money into getting your unit pre-inspected and obtain the occupancy permit and state sanitary code certificate before each new tenant moves in. This is the cheapest and most effective form of insurance for any landlord. Take photographs or video of the entire unit before the tenant moves in to properly document its initial condition.
4) Be Aware of Utilities.
Make sure any utilities that Tenant is to pay are separately metered and that it is clearly in writing that they are to pay.
5) Use Rental Applications and Be Thorough.
Be sure to have each applicant fully complete a rental application. Do your homework and check the references, and perform a thorough credit check on the applicant. When checking an applicant’s references, always check with and give more weight to the previous landlord’s reference rather than the current one. Don’t allow the tenant to take occupancy until the application is fully completed. If you use a broker, look over his or her shoulder to make sure they have confirmed their credentials. A broker gets paid as soon as the tenant moves in- but then if the tenant turns out to be bad- that’s now your problem.
6) Use Caution with Security Deposits.
Do not take a last month’s rent deposit or a security deposit unless you know, understand, and plan on following their detailed rules and procedures. If you have taken the time to thoroughly understand the rules and procedures, then you owe it to yourself to take both of these deposits. This will be for your protection and may eliminate less-qualified tenants.
7) Have an Attorney Close By.
Develop a relationship with a landlord-tenant attorney even before any tenancy problem arises. Like any business, many potential large problems can be avoided by taking the right steps early on. A quick phone call to a retained attorney can often nip potential problems in the bud. Furthermore, retain a capable attorney at the earliest stage possible to represent you in an eviction matter. Too many landlords attempt to represent themselves and invariably make a mistake. Even with the subsequent hiring of an attorney, an initial mistake (such as with the notice to quit) may be impossible to correct and may jeopardize the eviction. Do not get your legal advice from your barber, your accountant, or even a constable.
8) Demand That Tenants Respect Their Payment Obligations.
Refrain from listening to and buying your tenant’s excuses for not paying rent. (Your mortgage holder will not listen to yours.) With tenants who have not been with you long (under six months or so) and whose credit is unproven, do not hesitate to serve them with a 14 day notice to quit the first time they are more than 5 days late with the rent. If they then pay, there is no harm done and you have established your formal tone. If they do not pay, you may begin eviction proceedings immediately and minimize your losses. Do not delay when your tenant is in default. You don’t want to give them a chance of calling the board of health first- which now makes your subsequent notice to quit look retaliatory. Have a constable serve the notice to quit; this is the best way.
9) Protect Your Assets.
Make sure you take measures for asset protection. Consider owning rental property in an LLC or corporation so that it is separate from other assets. If you have a mortgage on your property, will need to obtain your bank’s approval. Also, visit with your insurance agent and/or attorney to review your insurance coverage. Do you have lead paint protection? Do you have mold protection? These are often in the form of additional riders only.
10) Rent Arrears Can Be Collected.
With tenants who owe you money, as they are moving out, be sure to gather up all the identifying information you have on them (name, date of birth, social security number, bank name and account number, and also note the make, model, and license plate number of their car). All of this can be used to find their new residence and can be very helpful in satisfying the back rent owed).