July 18, 2024 Mark Ferguson
An essential part of being a successful landlord is being strict with your tenants. Allowing your tenants to dominate can lead to a variety of issues, so it's important to diligently enforce your rules and rental agreements. Here we explain why you need to be strict and how it will benefit your business and your tenants in the long run.
Video: Why Landlords Need to Be Strict
Importance of fulfilling rental contracts
One of the main reasons for being strict with tenants is to maintain order and respect the lease agreement. For example, while the car wash was out of service, we allowed tenants to temporarily park there.
However, they took advantage of this generosity and started repairing the car, leaving paint all over it. This incident highlights the old adage that if you give in one step, you will be taken a mile. To prevent such problems, it is important to strictly adhere to the terms of your rental agreement regarding parking, use of the property, rent payments and late fees.
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Address issues quickly and decisively
When a tenant violates their lease, it's important to address the issue quickly. In the case of the car wash, we posted notices and warned tenants about having their cars towed.
Initially, they gave verbal and written warnings, but the car wasn't moved until they put a towing sticker on it as a more severe measure. This approach is also applied to other issues such as overdue rent and unauthorized use of property.
The role of the property manager
If you find it difficult to be strict, an effective solution is to hire a property management company, who can cite you as an authority on decisions and enforce the rules fairly.
This arrangement helps avoid personal conflict and helps your tenants understand the seriousness of the violation. It's okay to admit that you're not naturally strict and find someone who can handle this side of the business for you.
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Protect your investment and other tenants
Being strict is not just about maintaining order; it's about protecting our investment and ensuring a peaceful living environment for all our tenants. In another example, an illegally parked car was blocking trash collection and causing a big problem. We left notices, sent letters and posted no parking signs. The tenant didn't notice the message until his car was towed away. This also sent a message to other tenants that we were serious, and the problem hasn't happened since.
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Dealing with rent arrears and evictions
Late rent payments are a common issue, especially since the COVID-19 pandemic, and some tenants expect ongoing assistance. It is essential that you address late rent immediately by issuing notices and charging late fees. Allowing tenants to pay late rent without any penalties can lead to repeated defaults and ultimately have a negative impact on your business.
In Colorado, for example, you can't evict a tenant for not paying late fees — you can only evict them for not paying rent. This underscores the need to act quickly and strictly enforce payment rules.
Thorough screening of tenants
Many problems can be avoided by properly screening tenants before they move in. Conducting background checks, credit checks, and reference inquiries are important steps. Even with these precautions, about 10% of tenants may still cause problems, but this number can increase significantly if no screening is done. Relying on intuition instead of data can lead to poor decisions and long-term headaches.
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Understand and follow state laws
Finally, make sure your actions comply with state laws and regulations, which are constantly changing. Working with an attorney and accountant can help you navigate these complexities and avoid legal pitfalls.
Tools like DoorLoop, the property management software I use, can help.
Conclusion
Being a landlord is more than just owning a property. It's also about managing the property effectively and maintaining good relationships with your tenants. Being strict with your tenants is essential to the smooth running of the business and the happiness of all your tenants. It may not always be fun, but it's necessary. Setting clear boundaries and enforcing them will help you run a more efficient and successful property management business.
Have you ever had trouble with a tenant? Let us know in the comments below!