When you decide to invest in an income property there is often a learning curve involved and usually, most new investors will go about attacking that curve with gusto! It’s a new and exciting adventure and most folks who decide to get into real estate, develop an instant passion for it.
Of course, the same cannot be said for tenants. Oh sure, they have new home excitement when they find a place to live, but there is not the same sort of passion for discovery that comes with owning an income property.
And, there are definitely going to be things that you want them to know. Some of these things might seem quite obvious, but you are still going to want to make sure they are communicated clearly and in many cases repeatedly, so they set in.
Let’s go through some of the biggies you’re going to want to make sure you stress, and stress again, to any new tenant.
You need Rental Insurance.
Any tenant you accept into your property needs to get their own renter’s insurance policy. Many of the large apartment rental companies make perspectives tenant get an estimate as part of the rental application and then require proof of policy to be filed with the rental office within the first week of occupancy. It would be a good idea if you did too.
Your policy is not going to cover the tenant’s personal belongings should anything happen, and their policy will also protect them should they be found liable for any damages. It will often also provide third party medical in the event that anyone else was hurt as a result of their actions.
The rent you pay is what I use to pay the property’s bills.
It seems so obvious to anyone who has ever thought of owning an investment property. You extend your finances to make an investment purchase and use the revenue generated, through the rental, to cover as much (hopefully all) of the costs associated with maintaining the property. However, somewhere along the line many tenants have come to think of their landlords as people flush with all sorts of cash. This is why it’s important to layout in writing your policy regarding late rent. That said you also want to have a conversation, in a very respectful way and early on, as to why it’s important to the smooth operation of the property that the rent is paid on time each month.
We are partners in this deal and I’m not out to take advantage of you.
When you were learning all about the ins and outs of owning an investment property, you no doubt spent a lot of time learning about tenant screening. As a result you no doubt spent a lot of time doing that screening. It’s important that you communicate to your tenant just how much work went into arriving at this arrangement and how much it’s in your best interest to make sure they are happy and well served by your agreement. Let them know that you want to avoid tenant turnover and so long as they keep their end of the bargain it is simply good business for you to operate in good faith. Trying to take advantage of them only ends up hurting you in the long-run.
Repairs are my responsibility, so call me if something needs fixing.
It’s no fun when things breakdown. As an owner, it would be great if you didn’t have to pay for repairs; and as a tenant, it would be wonderful if things just always worked the way they are supposed to. However, when things do inevitably break down, many tenants are nervous to call and instead either let the problem fester or attempt to fix it themselves. It’s so important that you communicate up front that you are there to solve these problems. Make the tenant feel as comfortable as possible telling you when something goes wrong. Often, if the problem goes untreated it will end up costing you more. And, if they attempt to fix it themselves, who knows what you’re in for.
Like any business, I have set hours for non-emergency requests.
It’s important that you tell your tenants to contact you as soon as they discover a major problem. However, you also want them to know that for all non-emergency issues they should reach out as soon as possible, but during business hours. Waiting until Friday evening at 6pm usually, means they are not going to get it fixed until after the weekend. Most contractors, like most owners and most tenants, enjoy having a little time off to spend with their families in the evenings and on the weekends. Be clear about what is an emergency request and when you will reply non-emergency issues.
Not all problems can be solved in an instant, please be patient.
As a follow-up to the one above, it’s important that you communicate what is going on with any given issue as you’re dealing with it. Often you will need to order a replacement part for something or spend time troubleshooting an issue. Keep the tenant in the loop so they know that it’s being resolved. If they hear from you and know that
Keep the place as clean as you can.
So many times a tenant will make a pest complaint and when you go by to investigate you will see garbages overflowing and scraps of food left in the sink. Engaging pest control professionals can clear up the symptoms, but the critters are only going to return if the tenants don’t make a serious effort to keep the place in a sanitary state.
Your friends are an extension of you.
It’s important that the tenant appreciates that if they have friends over, they are responsible for any damage caused and any complaints that are made. The number of times a tenant will try to say it wasn’t them in relation to a problem caused by a friend of theirs can make you want to pull your hair out. Clearly, spell out the responsibility they are taking on when you are walking through the lease. You wouldn’t think you have to say this one out loud, but you may be glad you did.
Just remember that you can’t assume the tenant is going to know all these things coming in. Many tenants are arriving with baggage from previous rental relationships and it’s so important that you communicate clearly and upfront how you like to operate. That said, it’s never a bad idea to reiterate these things in future discussions or even create a tenants handbook with easy to find FAQs that can be left in the rental for their future reference.
The more ways you can reiterate what you need from your tenant the more comfortable they will be communicating with you. Which is all to say, the better your investment will be looked after.