This article was posted on Tuesday, Jul 01, 2014

If you’ve never heard of Jessica Carde, consider yourself lucky.  She’s the now infamous “nightmare tenant” who, although apparently near penniless, preyed on homeowners by finding high-end homes for lease and giving the owners a heart-wrenching story about her circumstances to convince them to rent to her – then moving in and never paying rent.  Even when faced with eviction attempts, she contorted the process as far as possible and in many cases threw up retaliatory and criminal accusations against the owners.  For 15 years she did this to one owner after another – some of whom lost their homes to foreclosure or went bankrupt as a result.

This is obviously a rare and extreme abuse of the system, but it raises a broader point about operating rental property.  How did the owners approve her as a tenant?  How much did they rely on just personal impressions?  Couldn’t a simple credit, background or reference check have raised flags for them?  It’s likely they were in a bind, believed it was an opportunity and believed her stories.

I’m not blaming the victims here, don’t get me wrong – she was cunning and knew how to target the vulnerable.  It’s the best part of our human nature to believe the believable and give the benefit of the doubt whenever we can.

But, as a rental property owner, you need to create objective rules for operating your property and the story of Ms. Carde got me thinking about examples where owners created problems for themselves by not doing so.

Like the property owner who delayed action against a tenant who was 60 days past due on rents because, “He’s a nice guy just going through tough times.”  Or the owner who rented to a tenant who didn’t qualify because “She seems okay; she’s probably just starting out and needs some help”.

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These are human responses – empathy is generally a good character trait.  But here’s the rub – it’s a fine line when the situation is a business matter.  And property that you own and for which you have significant financial obligations is a business matter.

Look at it from another perspective – if you operated, say, a gym, and a certain segment of your members were late paying their dues, you’d probably have a process to enforce with them.  A payment reminder followed by a warning letter followed by suspension of access until payment was brought current.  Because as a business, you know you can’t keep the lights on and the doors open if customers don’t pay for the services they consume.  There’s a big personal element that’s essential to being successful, but at the end of the day – business is business.  You have to view owning and renting property the same way.

That’s why as property managers, we develop and enforce standard business practices like:

  • Screening all applicants before approving one and offering a lease
  • Setting firm payment due dates and strict late payment consequences and in rare cases, eviction policies.

In our business, these have to be clear, enforced consistently and not diluted with emotion or apprehension.  Doing this sets the right boundaries and expectations for everyone – tenants and landlords.

Once these standards are established, personal aspects of the relationship can flourish.  For example, we make it a point for everyone in the office to know our tenants by first name and we send them birthday cards.  Believe me, it’s much more gratifying to send birthday wishes than late letters.

Three Ways to Spruce Up Your Tenant Services

With your rental property operations, it’s always a good idea to look at what needs to be updated.  There is a lot of good advice and lists for physical property maintenance, but what I’m talking about are your tenant interactions – how convenient you make it for your tenants to pay rent, report maintenance and other needs. Although they may seem trivial, these are things that make a big difference in retaining current tenants and attracting new ones.  Those are things we all know can cost – or gain – money in operating a rental property.

1. Online Banking/Electronic Payments

Like all of us, tenants are busy.  When it comes to paying their bills, they want it to be easy and painless.  And let’s be honest, paper checks, envelopes, stamps and mailboxes aren’t easy or painless. Even if tenants use their bank bill-pay services, you probably get a paper check that you have to take the time to walk into your bank and deposit.

There are literally dozens of online and electronic payment services available of varying costs and convenience that enable your tenant to make a payment via an online service that processes a rent payment to the landlord.  Your tenants will thank you, and you’ll find it much less hassle to get your monthly rents into your bank.  (Note that you should check all legal requirements regarding full vs. partial payment allowances to cover court requirements in cases such as evictions).

2. Online Maintenance Requests

We want tenants to report issues quickly and similar to rent payment, they want a way to do so easily and with added benefits like status, history and contacts.

Making a phone call, leaving voicemail and playing phone tag for an issue isn’t effective and even email can lead to lost information or unclear activity for an issue they report.  There are request management tools available that solve all this, or a simple online task-management solution might work well.  Either way, take a look at how you can improve your responsiveness and transparency for the maintenance issues your tenants report.  This alone can improve their satisfaction with your property, the value they get in leasing from you and their renewal rate.  (Note that hard copy mailed or posted communications are required in place or in addition to electronic communications for specific notices and situations such as notice to enter a unit and some others). 

3. Mobile Sites and Smartphone Access

Finally, this one encompasses the others, but is worth its own mention.  Even if tenants use online services – that’s great – but more and more tenants are moving to Smartphones as their PC, their internet and sole means of communication.  So, your rent payment, correspondence and maintenance tools should be “mobile-aware” meaning, well suited for use on a phone or other small mobile devices.  (Scrolling around a full page website on a phone browser is no fun, whereas a mobile aware site is optimized to display well on a small device screen.)

Many services and websites provide mobile-ready pages.  Keep this as a consideration when evaluating payment and maintenance services. 

Rob Armstrong is with RD House Property Management.  Reprinted with permission of UPDATE.

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