Many large apartment buildings simply choose to keep one suite empty at all times and have it as the “walkthrough suite”. Of course there are small problems with that idea if the suites in question don’t all conform to the same floor plan or square footage, but if they do, then this can be a great tool. This way, you can decorate the suite with furniture, art on the walls, appliances and even personal touches like pictures or delivery menus stuck to the refrigerator door. You can let the tenants walk around while you point out the suites amenities and explain to them that their suite will be exactly like this, only bare.

If you are managing a building where floor plans vary too much or it is not in your best economical interest to keep a perfectly rentable unit empty just for show purposes, there are small touches you can do to make a suite more welcoming. Try to keep the walls a nice, neutral color so that people aren’t instantly off-put by the space as soon as they see it. Also, visit the suite before you bring tenants there and do some last minute cleaning up and dusting/cleaning, just in case anything was left behind after the last tenants moved out. Open up any blinds so that as much natural light can come into the unit as possible. Change any light bulbs that need fixing and make sure everything that comes with the apartment, such as a fridge or stove, is in perfect working order.

As for bad news, don’t ever lead with it. You need to mention it since it can put you in a bind if you don’t, but make sure you’ve emphasized all of the positives about this space before you broach the subject of negatives. Don’t be afraid to use phrases like, “….but it doesn’t seem to be much of a drawback for our other tenants, no one really seems to mind.” You have every right to minimize any problems, but you must acknowledge them.

A final tip is to have a complete knowledge about that particular suite (or home) and about the building itself. Chances are, tenants are going to ask some off the wall questions, and if you can answer them with a big smile on your face, not only does it make you seem professional, it makes you seem reputable. Remember, no space is perfect, but if done right, you can make your rental property seem as good as gold.

The first thing you need to do is to try to divorce yourself from any kind of emotional connection you have between any renters that may apply to live in your building. It is hard to turn people out on the street that have gone through tough times, but let’s be honest, who hasn’t gone through tough times at some point in their life. You are trying to run a business, and it’s pretty safe to say that you had to sacrifice and work hard for a long time to earn the money that you’re investing with, so although it may be tough, you can’t afford to be a nice guy. Rent to people who can meet your requirements and don’t make any exceptions.

This lack of emotional involvement extends to once your tenants move into your building. Who doesn’t want to be friends with their tenants? Most people think that if they can forge a friendship, it will be less likely that the tenant will mistreat the property. While that may be true, that same friendship can get in the way of enforcing the lease agreement or even going ahead with an eviction. You’re playing with your own money here, you don’t have the time to make exceptions.

Maybe the best thing you can do is to simply trust your gut. If someone just strikes you the wrong way or something about them seems somewhat suspicious, then simply don’t rent to them. It’s far from a scientific way of dealing with things, but there is a reason why cops trust their guts every day, it tends to be the right thing to do. In lieu of that, make sure you check out every applicant’s entire rental history. If they don’t have one, then you might want to think about not renting to them. If it all checks out, then you should be in better shape. Also make sure you call their place of employment and even character/personal references to see if they are honest, hardworking people. There is no way you can be 100 percent sure, but by covering all of your bases, you can rest easy at night knowing you did everything you legally can to protect yourself.

A final tip is to make sure you enough clauses in your rental agreements to protect yourself in case a tenant needs to be evicted or does damage to your property while they live there. If you don’t already have a personal lawyer who will draw up your rental agreements, get one. You don’t want to try to draw one up yourself, you probably won’t be adequately protected. ]]> http://www.rentalproperty.com.au/protecting-your-self-against-bad-rental-tenants/feed/ 4 http://www.rentalproperty.com.au/should-you-rent-your-house-as-a-whole-or-room-by-room/ http://www.rentalproperty.com.au/should-you-rent-your-house-as-a-whole-or-room-by-room/#comments Mon, 14 Sep 2009 06:52:22 +0000 admin http://www.rentalproperty.com.au/?p=29 A natural goal of every landlord is to try to make as much money off of their investment as possible. Of course, this desire for profit must be balanced against the knowledge that people will only pay so much for what you have to offer.

The hard part is finding that perfect medium where you’re raking it in and your tenants don’t mind paying what you’re asking. One way that people have found to spike their profits is by renting their property by the room instead of all in one. There are both positives and negatives to this system. Let’s take a closer look.

The first thing you need to ask yourself is what kind of neighborhood are you renting in? A perfect place to rent a space room by room instead of as one big unit is if you’re close to a college or university campus. Most college kids don’t have the money to rent a 3 or 4 bedroom apartment or house, but if you divide that up into 3 or 4 separate living spaces, then you might be onto something.

You also need to take into consideration how saturated the local housing market is in that area. If there is a huge excess of apartments near this campus, then you might be left with one or two rooms rented and the others empty. But if the housing market is tight, you might have a line around the block for a room, even if they have to share bathrooms, kitchens and laundry facilities. You have to know what sort of housing market and what sort of clientele you’re dealing with before you choose to rent by the room or not.

One possible negative to renting by the room is that instead of simply collecting one rent check at the first of the money, you are now collecting 3 or 4 checks, which drastically increases your chances of someone not paying on time. It also increases the demand that you will have on yourself to fix things and to be “on call” all of the time.

Again, it comes down to the type of people you’re renting to. If you can rent to people that are independent and won’t be calling you at all hours, it might be a good idea to rent your property by the room, but if you are renting to a bunch of kids who just left home and are use to mom and dad doing everything for them, you might want to avoid it and simply rent your property as one living space.

A final aspect that needs to be taken into consideration is trust. By renting out your property room by room, it is going to increase the amount of foot traffic in and out of your property and that could lead to increased damage and wear and tear. Although the same could be true if you rent your entire property to a large family. Every situation is different so you’ll need to evaluate each applicant and the pluses and minuses that they all bring to the table.

How comfortable do you feel managing your property on your own? There are about a thousand variables that go into this question. Is your new property five rental units or 50? Are you new to buying rental units or are you an experienced veteran? Is management in your blood and something that you enjoy or do you feel more comfortable walking around with a tool belt and a smile instead of a clipboard and eviction notices? These are all questions that you’ll have to answer before you can decide which route you want to go.

Maybe the deal breaker when it comes to hiring a property manager is the budget that you have for your investment. If you’re a first time or small time investor, chances are you’ll be doing as much of the work on the property as possible and then bringing in contractors only when you have to. Most investors, when they start, don’t have the money to hire a property manager, even if it would make their lives easier.

Another major factor that goes into the decision is how close you are to the property that you’ve bought. Many investors move into their new investment and become the de-facto managers. But if you’re living on one coast and you’ve just invested in a 100-unit apartment building or even just a house with two tenants, you probably want to hire a property manager to watch over things since you can’t be there in person.

In the end it comes down to what you’re more comfortable with. If your comfort zone with a rental property is the repair and construction phase and not the paperwork and office phase, a property manager might be a good investment, even if it means less profit in the end. The peace of mind that a property manager can provide is more than worth the cost. But for most investors, the budget simply doesn’t allow for the hiring of a full time employee to watch over things.

A happy medium for many folks is to use a property manager the first few times they invest in a property, even if it means taking an overall loss on the investment simply to learn the ropes of the job, and then, in the future, you can take over the reigns of property management. Some folks will actually take some classes if they don’t have a business background on property management so that they don’t have to go through the expense of hiring someone. It all comes down to what you are comfortable with and how you feel comfortable spending your money.

Either way, being a landlord is a tough job. But knowing how to get the most out of your rental property is a big part of succeeding as a landlord and as a real estate investor. Let’s take a closer look at a few things you can do to get the most out of your property with the least amount of headaches.

The first thing you need to do is to get to know the area in which your rental property is located. If you can, talk to neighbors and see what amenities their properties have to offer and see how much it would cost to implement those things in your property.

If the property you own is in a somewhat low-end area, think about installing extra locks on the doors so your renters feel safe or maybe a home security system. If it is a higher-end neighborhood, maybe look into a Jacuzzi in the bathroom or a two-person sauna. Knowing your area and knowing what renters in that area are looking for is a huge part of keeping your space rented and the money flowing.

Although it can be easier said then done, try to be as responsive to your renters as possible. We’ve all heard the horror stories about renters calling at 3am because a light bulb burnt out and they want you to come over and fix it, but most renter requests are reasonable, and if you want to keep your renters happy, you’ll respond as quickly as possible.

After a few short conversations, most people can gauge the level of expectations a renter is going to have of their landlord, so try to rent to folks who know enough to change a light bulb on their own and only call for serious things that are spelled out as the landlord’s responsibility in the lease. By renting to the right people and fixing any problems as soon as possible, you’ll keep good tenants year in, year out.

This last tip is a bit of a no-brainer, but be honest with your renters from the first time you meet them to show them around the place to the day they move out. If you are misleading in your ad for your property and then misleading during the walk-through and you have a lease that is less than clear, it is going to lead to tension and even arguments with your tenants. Mom always taught that honesty is the best medicine and that is very much the case in a renter-landlord relationship.

Unfortunately, there is no secret formula for getting the most out of your rental property. But by keeping up repairs, catering to your desired clientele and being forthright and honest with your renters, you can expect much better results over the long term.