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Make sure your landlordship starts out on the right foot

What to Do Better the Next Time You Negotiate With Your Tenants

Due to uncertainty in the markets, renting has become more popular and more of a neccessity than ever. Renters today commonly find leasing less expensive and more stable than owning and former homeowners may find that renting is a more reassuring option after losing confidence in homeownership.

Many homeowners find that their life circumstances have changed and their homes no longer suit them but because they are low on equity, they cannot afford to sell. So renting is a viable alternative to selling via short sale or foreclosing.

In June 2010 Trulia called Seattle the 3rd most renter friendly area in the nation and Zillow reports that in December 2011 the median rental list price in Seattle for a single family residence was only $1400/mo. This is far less than the average mortgage amount based on the current median home price in King County and current interest rates.

New landlords can curb the competetive renter’s market to their favor by implementing the following tips the next time they go to negotiate their lease:

Super Landlord Tip #1: Include in your lease the following wording: “Tenant shall be required to pay the landlord a service charge of $75 if it becomes neccessary for the landlord to deliver a legal notice for any violation of the rental agreement.” I had a tenant that consistently paid her rent 5-10 days late every month because she was just the type of person who was chronically behind. Around the 10th day I would deliver the ”3 Days to Pay or Quit” notice and sure enough I would get the rent money the next day. I beleive if I had added this languange into the lease up front, she would have had significant incentive to not be late and I would get paid on time every month. Or I would have had an extra $500 in my pocket.

Super Landlord Tip #2: Put together a list of 5-10 churches or agencies in the area who will help residents who are unable to pay their rent one month. This can and does happen even to good tenants. Times are hard and life happens. Although it’s frustrating and you don’t want to make it a habit, assisting the tenant if they apear unable to pay will increase the chances of you getting paid rent. When you have a tenant that has a good track record of paying rent but has a legitimate problem one month, give them the list.

Super Landlord Tip #3: Charge $50 per person for a tenant screening even though it’s typically $25-35 per person. I think at the $50 mark it gives people pause and you’ll be able to weed out the tenants who are serious. Oh yeah, and actually DO the tenant screening including the credit and criminal checks.

Super Landlord Tip #4: Tell a tenant that you’re looking forward to helping them as a “preferred” tenant who pays on time and has no complaints against them. Tell them that preferred tenants receive special service such as a free carpet cleanings once a year in addition to writing a glowing recommendation for them to their next landlord or employer.

Super Landlord Tip #5: Lease your parking spaces and storage units seperately if you’re renting a condo. If you have a parking space or two or a storage unit, rent that for an additional $35-75 month in order to generate more income. This is in keeping with most apartments in the Seattle area.

Super Landlord Tip #6: Ask tenants if they would like a ceiling fan, alarm system, espresso machine, furniture or tv added to their monthly rental. If they say yes you’ll recover your expenses within months and profit thereafter.

Super Landlord Tip #7: Make sure that in the lease agreement it states that the tenant must give the landlord at least 45 days notice before leaving because most of the time the 20 days notice that is required by law just isn’t enough time for a landlord to regroup and prepare for the next tenant. Also make sure that there is wording in the lease that allows you to show the home to prospective tenants (while the tenant is still living there) at a time and date that’s predetermined or mutually acceptable. For example the landlord would be able to show the property between 1pm and 3pm on the 2 Saturdays prior to the tenant vacating.

Super Landlord Tip #8: Be on good terms with your tenants and communicate. Be more than just the landlord collecting their money. Make sure that your tenant knows that they can come to you if they need anything within reason or see changes or problems down the pipeline. If the lines of communication are open you’re more likely to get courtesy calls when they’re going to be a day or two late paying rent, rather than you chasing them down and losing sleep wondering what’s going on with your renter.

Super Landlord Tip #9: Trust your gut. If a prospective tenant shows up to the showing with their steady girlfriend who owns 2 giant dogs and the tenant says that he is going to be the only one living in the home and declines to pay a pet deposit, your inner voice is likely going to say ”there is a pretty good chance the girlfriend is going to be here in home with him most of the week and likely those dogs are going to be on my hardwoods.” And you’d be right. So although the single tenant will be the person responsible on the lease, clarify up front in the lease that the girlfriend, by name, will be able to stay in the home but the dogs will not. Or whatever you agree to. And even if they agree to not have the dogs in the home, increase the damage deposit because your gut is telling you that those dogs will be there at least some of the time.