Believe that most of the landlords have the experience of bad tenants. Tenant problems plague landlords everyday. Reducing the rent to maintain the good tenants but will affect a landlord’s profitability. While eviction those bad tenants can costs a landlord time and money to look for other tenants. These are not be the best method to solved.
Whether you have been a landlord for many years or a newbie who preparing to rent out your very first property, it is important to understand how to deal with the tenants. Here we share with you the guidelines of tenant management that has worked for many experienced landlords;
① Interview Prospective Tenants Personally
This is the best way to let yourself stay out of troubles. It’s better to play safe and rent out to only good and reliable tenants, even if the rental is slightly lower. If you have hired property manager or pass your property to property management company to take care of, don’t depend 100% on them as they may interested in closing the deal and getting their commissions as fast as possible. Insist on conducting the final interview by yourself. You must get to know your prospective tenants as intimately as possible.
During the interview session, you should find out;
➢ Their employment details (to ensure they can afford to pay your rental and the most importantly pay the rental on time)
➢ Their rent home history and reasons for moving (to ensure they aren’t evicted by their ex-landlord. If necessary, get their ex-landlord contact details for yourself to check whether they are bad tenants)
② Invest In The Rental Properties Nearby Your House
Invest in properties maximum 10 kilometers or within 30 minutes driving time from your living or working place. This can makes your property investing that much easier as you are familiar with the areas and can reach on site if there are any problems with your properties.
Besides, if you invest in landed properties, you can drive by your house every once in a while to make sure everything looks find from the outside. While, if you have relatives or friends staying nearby, you can ask them for a favor, help you to keep an eye on your tenants and your properties.
③ Rent Out To Young Couples
It is better to have your rental being paid from one source (e.g. couples) instead of a few people. This is to prevent if one of them can’t pay for the rental. This case most often will be happened in the property nearby universities, as most of the tenant would be students. One house could contain up to 6 people (e.g. 3 persons in master room, 2 persons in middle room, and one person in the smaller room), if one of them unable to pay the rent, and others have no extra money to help he/she up, it can then affect your profitability.
Additionally, if you prefer to rent out the property to the students, you should look for a responsible and matured student with leadership qualities and assign him the job of rent collection and finding new students. Once your appointed leader is about to graduate, ask him to recommend you the successor amongst the students staying at your place. Preferably his successor must be in his first year instead of his last, so you no need to worry about changes of successor so soon.
④ Rent Out To Professionals or Foreigners With a Valid Work Permit
Look for the tenants who have steady job or foreigners with a valid working permit. This is to ensure they are able to afford for the rental and pay it on time. Most of these people are finding a property nearby their working place and they may willing to pay for the higher rental. However, before setting your monthly rental, you have to check the similar rental properties in the area and make sure you have not set a outrageous rental.
⑤ Rent out Unfurnished Property
If you worry your tenants will “destroy” your furniture, it is best to rent out unfurnished property. All you just need to do is clean and paint up the whole place when your tenants leave. Through the property Malaysia investment seminar, an expert share with us his experience of bad tenants. When the time he took back his apartment from a bad quality tenants, he found out there were burnt marks all over the kitchen cabinets and sofa filled with burnt cigarette marks. Terrible right?
Although a fully furnished property can get a higher rental, but if there are damages on the furniture, it will caused you to spend money to buy the new one to replace it. So, what’s the point? rent out unfurnished or partially furnished property instead.
⑥ Build Relationship With Your Tenants
Establish a good relationships with your tenants seem to be a good method in tenant management. But, do keep in mind that not too close with your tenant as they may start taking advantage of you. You just need to see this relationship as a business relationship, hence do maintain a certain distance.
It is important to train your tenants right from the beginning to follow certain rules. Be frank with them and make it very clear to them that you expect cleanliness, prompt payment and no fitting are to be removed without your consent. Be strict initially and later once they get used to you, you can get a little friendlier. Besides of that, you can learn how to build a good landlord-tenant relationship by clicking the link below.
⑦ Set A Tenancy Agreement
This is an agreement that made between landlord and tenant. This is a legally binding documents. In the event of any legal disputes in the courts, the contents of the tenancy agreement will come into security. Hence, it is very important for both landlords and tenants to fully understand what they are signing.
You may insert the following clauses in the agreement;
➢ Standard deposits (the standard deposits are 2 months for rental and 1 month for utilities)
➢ Utility bills (to show you a photocopy of utilities bills once every six months to ensure all bills are paid on time)
➢ Minor repairs (for example: the tenant has to bear any repairs below RM 50 per item)
➢ Major repairs (ask the tenant to compare the prices from separate sources and get your consent before proceeding)
➢ Hand over and take over (if you find plumbing system, electrical items or anything else are damaged, charge it to the tenant and deduct the repair and replacement costs from the deposit)
➢ Eviction (if the rental is not paid for more than 2 months, you will have a right to enter the property without informing the tenant and take over the property)
⑧ Automate Rental Collection
To make it easy for you and your tenant, you should automate the rent collection process. Get your tenants to do a online transfer/ bank in the rents before the due date and send you a picture of the confirmation slip. This method can save you a lot of time and energy from one place to another for just collecting rental every month.
You must train your tenants to stick on this rental payment system and not let them pay as whatever they like. This automated rental payment can makes you both parties more easier as you will bother the tenant less and the tenant will receive a lot less reminder calls.