How to be a good landlord for myself as the landlord and for the tenants
May 20, 2016 7:11 AM   Subscribe

We are looking at buying a house with a tenant - after years of being a renter, I might become a landlord! How do I make sure I'm a good landlord, but also make sure to protect my property and myself? As a renter, I know that I've been screened through some background and credit checking services, should I use one of these services as a landlord? If so, which one (or how do I choose one)? What else should I be thinking about?
posted by ashworth to Home & Garden (15 answers total) 13 users marked this as a favorite
 
Read your local tenancy laws carefully. A lot of landlords have no idea what is expected of them by law and violate people's rights through ignorance rather than malice.

I much prefer proof of income and other landlord references to background or credit checks - a lot of people either don't have credit, or have had medical bills go into arrears, or took a dive during the recession. A lot of credit reports have major errors on them and the credit companies are notoriously unwilling to deal with obvious mistakes (see Jon Oliver's recent report if you need evidence of this.) You box out a lot of very good people with something that, quite honestly, is not often an indication of their current state.

As a renter of many places, what sets a good landlord apart from a bad one is how prepared they are to deal with bad shit happening. Do you intend on managing this property yourself or through a company? If the former - you should do all of your research now into a list of reputable plumbers, roofers, HVAC repair people, etc. Not having heat for two days or hot water for three (this happened to us - right as I was about to interview for a job) because a landlord was unprepared for a bad situation is horrible.

Figure out what you are going to do when you go on vacation - delegate authority to a person you trust, or to the tenant to do what they need to if something breaks.

Also - really good landlords afford a small budget every year to property improvements. Involve your tenant in this - our current landlords replaced our front windows because they were drafty, and it's the main reason we re-upped for a third year...we feel like we have a say in our home. If you want long-term relationships with tenants, invest in them.
posted by scrittore at 7:35 AM on May 20, 2016 [6 favorites]


One great resource is Nolo Press. Check them out for easy-to-read and accurate legal advice, including templates for paperwork you may need.
posted by latkes at 8:20 AM on May 20, 2016 [1 favorite]


We've used mysmartmove.com as tenants and as landlords. It's easy for both sides, and all done through the website, so the landlord sends the tenant an invite to fill out the form.

If you were hoping to secretly background check the person already living in the house you're thinking about buying, I'm pretty sure that is not legal in North America.

This might be worth the price of a short chat with a real estate lawyer. You do want to be careful (we lost our house thanks to a tenant from hell, who was not properly background checked), and also not get sued.
posted by Lyn Never at 8:31 AM on May 20, 2016 [2 favorites]


As a long time renter, I would highly recommend doing a walk-through of the apartment and noting (with the tenant) any issues that need to be corrected or were problematic before they sign the lease. This is actually law in Massachusetts (where I live) but I've had only one landlord do this in my five apartments.

Be clear about how maintenance, emergencies, and anything else should be communicated (text? phone call? when will you respond? who will be responding?). One of my standard questions to a landlord when looking at apartments is "who does the maintenance?" If you plan on doing maintenance, please (for your sake and theirs) know your limits! I've had landlords who "fix" things that never quite worked right again.

Know your rights and obligations! Know the tenants' rights and obligations too! It seems like having a lawyer at the ready may also be a good thing.
posted by thefang at 8:57 AM on May 20, 2016 [1 favorite]


Do a walk-through with a punch list AND a camera. Note how the property was delivered to the tenant, and archive this information. Get the tenant to sign off on this.

If there are any issues with the unit that you end up addressing, take pictures, get the tenant to sign off on them.

Keep deposits in a separate, interest earning account. Understand at closing what monies are in deposit accounts and get the tenant to sign off on this before you close. Make sure the deposit money is made over to you in the deal, as you will have to refund it back at some point.

Verify with your local municipality that the rental unit is legal and on separate meters per local codes.

Inspect the unit before you decide to purchase this property. If it's an unholy mess give the whole thing a pass because that's either an indifferent tenant or an indifferent landlord and who needs that.

Do a search for any pending cases in small claims or housing court. Are these folks selling their place to get away from a horrible tenant? It's easy enough to do and it's worth it to discover that you have a perfectly normal person living with you/near you.

You don't say if this is a rental property or if it's a home you're buying with an existing tenant, and that makes a big difference.
posted by Ruthless Bunny at 9:14 AM on May 20, 2016 [1 favorite]


Your local tenant advocacy center generally also has materials available for landlords to help them do a good job, learn about that is and is not legal, and provide access to standard forms for leases, checklists for walk thought, how not to violate HUD equal housing laws, etc.
posted by rockindata at 9:29 AM on May 20, 2016


I was a long term apartment manager, then home owner with a rental unit attached. You will need a valid rental agreement for your state and a general knowledge of rental law and how they work on a pragmatic level of day to day landlording. You'll also need things like an application form, lead disclosure and handout, a way to do credit checks, move-in/move-out checklist, inventory of your unit and probably a lease addendum laying out any special terms or agreements you would have for the tenant. I use Mr. Landlord to do credit checks. It's gotten a bit stickier and you have to pre-qualify in order to make one. John Reed has a series of landlord related publications, any one of which would give you the necessary backbone you will need to run a rental successfully, and you will need to know your rights and responsibilities from the get-go so you don't make costly errors or assumptions.
A tenant in a unit at your home has a certain level of both intimacy yet legal boundaries you have to learn to negotiate effectively. If you stay friendly with a tenant, that's great but at the very least your relationship should be effective at maintaining lines of communication.
Get in mind your preferred tenant, the optimal scenario and keep that in mind as you interview for new tenants. You can't discriminate on several aspects but you can be choosy about who you allow to live there.
The successful tenancy starts when you choose someone to rent to, so make sure that credit check is done completely including FICO score. Call references and confirm job status. Run an honest business, refund completely, be generous when you can afford it and it will all work out. Terrific way to help with the mortgage.
posted by diode at 11:02 AM on May 20, 2016


As noted above, local tenant advocacy organizations/local legal aid for landlord-tenant disputes is an excellent resource for small landlords; it's not just for tenants. Their self-help guides can be invaluable.

Always do things in writing, no matter how good your relationship with your tenant. Check with a tax accountant your first year as owner of rental property, to be certain you're handling the multi-year tax schedules properly. Keep all your receipts (both rent and repair/maintenance receipts) well-organized. Find a good local handyman (or three) and develop a good relationship with them for leaking faucets, broken light fixtures or whatever home repairs you can't do or don't want to do.

I use an agent for finding and screening tenants. He runs income verification and landlord references, but more importantly, he has time to meet with tenants and show them the properties while I'm at work or living my life. I like him and he finds tenants who love the neighborhood (despite the lack of parking and hordes of Cubs fans) which has led to some long, pleasant tenancies.
posted by crush-onastick at 11:28 AM on May 20, 2016


Local groups (Parks & Rec, Community Colleges, Senior Centers, etc) often have landlord or property management classes that cater to the laws and practices of the local area. These can be a huge help and usually don't cost more than $100 for a few hours with knowledgeable instructors. They often provide form templates and other materials to get you started off on the right foot.
posted by annaramma at 11:36 AM on May 20, 2016


Accounting.

If you've never owned a house, understand that they have all sorts of "leeching" expenses associated with them. Insurance. Tax appraisal hikes. That spot in the roof that sometimes leaks but sometimes doesn't and the tenant never mentions it. Air filters. Water filters. The air conditioner that broke when it ran for 24 hours a day all year long. etc. etc. etc.

Certainly, they're not insurmountable if you're getting enough rent. And you won't know unless you've got your accounting set up right. Some landlords (especially one unit owners) wind up operating at a loss because they comingle their rental income and expenses with their personal finances and simply don't know how much their rental costs to upkeep.

Something as simple as setting up a separate bank account where you deposit the rent and pay out expenses can solve most of that.

Having an accountant and a lawyer give you some advice at the front end will save you in the long run. Plus, it will establish a relationship that you can call upon should anything go awry down the line. ("I'm about to become a landlord. I wonder if we could meet for an hour consultation to get to know each other and cover the basic things every landlord should know?")
posted by GPF at 11:39 AM on May 20, 2016 [1 favorite]


By the way, don't just trust random sample rental agreements on the Internet. The laws vary considerably from state to state. Before I moved into one place, I had to sit down with the landlord (a friend) and go through everything in the agreement that I knew from the bar was not actually enforceable in my state. (E.g., states vary on whether the landlord can engage in "self help" when evicting. What is legal in one state can get you arrested in another, even if the lease says it's fine.) It took more than an hour. She wasn't trying to rip me off; she was just working from some sample agreement that clearly hadn't been drafted for our state.
posted by praemunire at 11:46 AM on May 20, 2016 [1 favorite]


Honestly, I got a recommendation for a good agency to handle my property and continue to see it as money well spent.
posted by AnnaRat at 4:39 PM on May 20, 2016


You can also check with a property management firm to see how much it would cost to have it professionally managed. I have had rental properties before, and if I had to do it again I would not want to manage it myself.

A tenant always has a right to "quiet enjoyment" of their property. So, you can't just enter unexpectedly. It's good to give them at least 24 hours notice, and they appreciate more.

Work with the tenant to establish a rent due date. Every landlord always makes it the first, but it might be easier for the tenant to make it the 15th ... make paying you as easy as possible!

Our leases had clauses in them that stated if the rent was late by more than 3 days, the monthly rent would go up by $50 a month. We never had to enforce this and always got the rent on time.

Don't let the tenant deduct anything from the rent for repairs! It's technically a violation of the contract. It is fine to reimburse the tenant once they have provided you with receipts.

Let your tenant hang stuff on the walls and have pets, but check with your insurance company too. They may not cover some types of dogs. Insist on a pet deposit equivalent to the cost of replacing the carpeting.
posted by Ostara at 6:10 PM on May 20, 2016


Our leases had clauses in them that stated if the rent was late by more than 3 days, the monthly rent would go up by $50 a month. ... Don't let the tenant deduct anything from the rent for repairs! It's technically a violation of the contract.

This is a pretty good example of what I was talking about earlier: The second statement is very much not true in some states, and I think you could potentially have problems with the first provision also (as it's effectively liquidated damages).
posted by praemunire at 8:00 PM on May 20, 2016


I am a really small time landlord - I own a duplex. (IANYRSTLL)
How to be a good landlord? When someone rents a unit, I tell them in no uncertain terms, if something goes wrong, I want to know about it. If the drain on the sink leaks a little, let me know so I can fix the leak and not replace a cabinet *and* fix the leak.
I actually had some very good, nice, tenants "not want to bother me" because the light in one of the rooms would not turn *off*. A wire had broken at a switch and the current was going to ground through the old metallic sheathed conduit. Could have started a fire.
Follow through, fix the little things. It keeps the tenant happy, and prevents little things form becoming big things.

Second thing is a "trick" I was taught by another RSTLL - Insist on a 6 mo. lease with a new tenant. No longer. Rent it for about 50/month more than you actually want to get.
At the end of the 6 mo, if you have a good 'keeper" tenant, lower the rent 50 bux and tell them why you are doing it. "You've been quiet, paid the rent on time, and kept the place up. I appreciate that so I am going to lower your rent. " Who has ever had their rent go down? They will stay. I count on loosing 1 to 1 1/2 months rent when someone moves out.
If it is a crappy tenant, adjust the rent up accordingly, or just don't renew it.
My biggest mistakes? Not doing thorough enough background checks on people I didn't personally know. Letting people I personally know take on roommates without me doing a thorough background check on the roommate. Because next, the person I know moves out and leaves me with POS tenant.
If there is a roommate situation, each roommate signs the lease, and is held liable for the whole amount of the rent. I don't have time for getting involved in money issues between roommates.
I provide a washer and dryer. It keeps people form dragging appliances through the house, and makes it more attractive. I have one tenant right now - nice, quiet, pays the rent very much on time, keeps the place clean, but she lets her friend come over and do her laundry. Every damn week. I'll add some language the next time I rent one of the units.
DO NOT let tenants paint! They typically do a crappy job, get paint on things, etc. Same lady above wanted to paint, put miles of painters tape on surfaces because she didn't know how to paint and how to cut in at trim. Left it on for months despite my disapproval. The stuff will get very well adhered over time, and in fact lifted the finish in places on a wood floor I had put in just before this tenant moved in.
posted by rudd135 at 6:19 PM on May 21, 2016


« Older How to find month-long housing in Melbourne   |   Employer doesn't know how pay promised insurance... Newer »
This thread is closed to new comments.