Note to readers: The below tips are shared by landlords nationwide –please be sure to check the rental laws in your jurisdiction as they may differ from suggestions in this article.
Secret to Keeping Ideal Residents
A landlord asked on our Q&A about a common landlording issue, the renewal conundrum. The landlord had an ideal resident who pays her rent on time, doesn’t complain a lot, does not bother neighbors or damage anything, and that’s about as good as it gets.
“The problem is young people never stay. I expected her to do a year and then move in with her boyfriend, or back with family, hanker for a new place, whatever. Her lease is up on March 31st. So my question is, if you have a good renter and want them to stay and renew, when should you offer them a lease renewal, and how is it handled?”
The landlord’s first thought was to offer a renewal right after she pays her last month’s rent, aka March 1st. But this may lead to the resident looking at new places for a whole month. Once they get it into their head that they want someplace new, they’re gone. So what are the thoughts of other landlords?
Following this question came the usual mix of landlord responses. One suggested that the landlord first make sure that the resident knows she has the option to stay, because some renters don’t realize that they have the option to extend the lease. It was also suggested to give a 30-day notice to renew and preferably even 60 days so they won’t feel in a rush to run out and immediately look for another place.
My Secret for Keeping Residents More Than a Year: To the landlord with the renewal conundrum, let me share with you a concept that has worked extremely well for me over the years in keeping ideal residents for more than one year, and has saved me thousands in turnover costs. Consider utilizing this for all your future residents moving forward.
The secret to getting residents to stay longer than one year starts not 30 days out, not even 60 days out. It starts with the MINDSET you CREATE, going all the way back to the time of application and at the initial lease signing.
On the application you ask: Would you like to receive a gift every year on your anniversary date? (By the way, never use the term “renewal” with your residents, use the term “anniversary” date).
On the lease agreement, the first line reads: Welcome! As one of our new 3-Star Residents, we look forward to serving you for the next three years.
It’s all about creating and reinforcing this mindset throughout the term, including asking them to let you know which anniversary gift they want to select from a couple of options you offer. And you ask this “six” months before their anniversary date.
This is just one of many ways you can rid yourself of the renewal conundrum, add to your peace of mind, and save thousands on turnover costs on even just one rental.
Fee For Fish?
Do you charge a monthly fee for a pet? It’s typical for landlords to charge fees for pets, especially for cats and dogs. But what about pet fish? This is a topic which is very seldom even brought up between landlords and residents. Some landlords charge a monthly fee for fish. One example I read recently, a property manager charges $15 a month to allow pet fish.
If a resident just happens to bring up the subject (or much more likely scenario, the landlord discovers a large fish tank during a property inspection) some landlords will require that the residents have renter’s insurance if a large aquarium is kept in the rental. For the average landlord, most don’t address fish as pets in their leases with rental residents one way or the other. This short note is just for you to consider giving thought to this topic and possibly addressing pet fish in the lease and whether you charge additional monthly fee or require additional deposit or renter’s insurance when large tanks are involved.
Do You Require Bank Statements?
More of our website visitors are tightening their screening standards and requiring that applicants have a bank account and provide copies of recent bank statements. One landlord took a closer look to see if there was anything in common with the residents he eventually had to evict. The landlord concluded that requiring bank accounts as part of the screening criteria would reduce the chances he ended up in court.
Hopefully, you have not had to take any residents to court. But if you do, I’d encourage you to do as the landlord did and review the applications of residents who have caused you the biggest problems. Consider what you can do to tighten your criteria to reduce your chances that you may end up back in court.
Charge An Application Fee
When we start talking about applications, this is the first thing I always want to mention, because I see a lot of landlords that manage their own property, that don’t charge application fees. I’m a huge believer you need to charge application fees. It’s just, to me, a requirement.
I used to be like many landlords who did not charge an application fee. I initially was very hesitant to charge application fees. I didn’t want to do it because I felt like with the application, I won’t get as many applications and people won’t respond as well. I would get as many applications as I could and rather look at all of them. That was a huge mistake on my part. I do NOT need to look at all of them.
We charge a separate fee for each adult applicant, whether you charge $20, $35 or $50. Check your state laws to make sure you do not exceed the state limit. If your fee is $35, that would mean for a husband and wife, it’s $70. Again, we require an application for every person that is over the age of 18. We want to know who’s living in our house and we want every adult on the lease.
I know guys that charge a lot more than that. Part of it has to do with their local area. Some charge $75, some charge $75 regardless of if it’s one or two persons. Whatever price you choose to charge, my suggestion is that you need to charge something for an application fee, if you’re not already doing so. When you do applications and charge a fee, it can help you to get more qualified applicants.
The tips in this column are shared by regular contributors to the popular MrLandlord.com Q&A forum, by real estate authors and by Jeffrey Taylor, [email protected]. To receive a free sample of the Mr. Landlord newsletter, call 1-800-950-2250 or visit their informative Q&A Forum at LandlordingAdvice.com, where you can ask landlording questions and seek advice from other landlords 24 hours a day.