The question of how strict you should be on tenants is a daunting and tricky question that all landlords must ponder and carefully consider and weigh in their decision making in managing both residential and commercial properties.
If you are too loose as a landlord in management you will often find that rents fall behind and tenants take advantage of you.
If you are too tight as a landlord, you likely experience greater tenant turnover and you will likely incur greater set up costs and marketing expenses as a result.
The goal is to find a middle ground where you're not too tight and not too loose.
Here are some tips on how to become a great property manager and and have good tenant relations:
Screen all potential tenants - The more work you do to screen potential tenants (within the legal limits), the better off you will be. Don't ever be lazy and skip this important step. Determing the potential tenant's ability to pay and likelihood of stability is a key in placing a stable and good paying tenant. During this screening you as the landlord need to act unemotionally and also never act hastily. Don't ever let a vacany let you make a bad tenant placement decision out of desperation. Be patient and wait for the tenant that makes the most sense, take the short term hit to make a home run in the long term.
Use fair judgment when a tenant is late on payment or falls behind - Anyone who is a landlord will experience a tenant who goes late on a payment or even falls behind on the rent. When this situation arises, be calm and collected and use your reasonable logic to size up the situation. There are an infinite amout of reasons for these circumstances to occur. When they do, you simply find out the reasons and make a judgment call on how to proceed. If you think the tenant has a legitimate short term reason for the problem and still has the ability to pay long term, then work with them and hopefully get the situation mitigated. However, if upon hindsight being 20/20 you feel as though you may have made a mistake with the tenant placement or you feel like you've been lied to or deceived, don't hesitate to take the quickest and steadfast actions to remove the tenant through the legal eviction process.
Be Pro-active with tenants - Always be pro-active with tenants and be aware of their circumstances - this especially applies to commerical tenants. If you know in advance or have an inkling that there is a potential problem with a business tenant you have placed, then start making plans for a quick and swift transition. This usually involves marketing the lease space even prior to the tenant leaving. The more you know in advance the quicker you can turn the space over to a better paying tenant.
Hire a fair and like minded property manager - If you don't manage the properties directly yourself and have delegated this duty to a property manager, make sure that they are fair minded and on the same page with you on how to manage the property. The last thing you want is to have some one be your agent who is doing things that are not the way you would handle it yourself. A good agent manager will have lots of communication with you and allow you the option to have the final say on important matters.
Look at the bigger picture during externally financially challenged times - If there is a worldwide crisis like Covid-19 or a financial implosion in the economy assosiated with terrorism, war, or an outright financial market crash, you as the landlord will need to weigh these external factors in your decisions regarding your tenants. Under these circumstances, you will need to potentially be a little more lenient on tenants who are late paying or fall behind on rents. If you evict the tenants who are behind on rents during a worldwide or national crisis, you are faced with a potential vacany that may take a lot longer than normal to fill. You may have to consider working with distressed tenants during the short term with the hopes that in the long term you will eventually recover the rents in arrears when financial times are better.
We hope this article helps you on how to better deal with your residential and commercial property tenants.
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Great Article!