The #1 thing we hear from owners that were currently managing an investment house themselves is the tenants aren’t paying rent. It’s sad because if tenants don’t pay rent --- real estate investment can turn into a very costly endeavor. Since it comes up so frequently, we thought it might make sense to highlight a few things we have found over the years to ensure tenants pay rent on time. Here are a few must-have’s if you are going to make sure you get rent…..
Credit Check AND Criminal Check for all tenants. This is an absolute must-have. A quick story for you to illustrate. My Dad rented his house out when he was out of the country for a year (he didn’t use SlateHouse to manage it!). He didn’t do a credit check --- the tenant looked like a perfect candidate because he was a teacher with a solid job and income. Fast forward 6 months later and the tenant didn’t pay 3 of the 6 months rent and eventually had to be evicted by the cops. Why? Well ---- it turns out he was a drug dealer with a major addiction problem --- who happened to also be a teacher during the day. A credit check would have most likely uncovered his poor credit and shown he was a risk as a tenant.
Maintain Strict Rules. We have very specific rules that we follow at SlateHouse Group and highly advise all owners to do the same. If rent is late -- a late payment is charged. If rent isn’t paid in full by the 15th, we start the eviction process on the 16th. It’s never fun to make rule and enforce them --- but that’s the only way you will maintain tenants that actually pay rent on time.
Make it easy to pay rent. Tenants all want to pay rent different. Some want to pay online, some want to pay by money order in person or the mail. We are open to accepting rent many different ways --- which makes it easy for a tenant to get it to us. The more tenants that pay rent online the better --- as we have found these have a higher likelihood of actually happening in a timely manner.
Maintain the unit. As an owner, you need to do your part. Fix things in the house in a timely manner -- and tenants will be more likely to pay their rent in full. Often we buy houses that are in bad shape and the tenant hasn’t paid rent for a year or more! No surprise --- we wouldn’t pay rent either if the roof was leaking!!!
Evictions aren’t fun, but are important. Nobody likes to evict a tenant, us included. It’s sad for the people and is a very timely endeavor. But if a tenant doesn’t follow the rules -- you have to follow the eviction process or you may never get rent again. At SlateHouse -- we are very strict about following the eviction process exactly as we lay out in the lease that the tenant signs and abide by all the laws of Pennsylvania and surrounding counties.
Treat Tenants with respect and honesty. Tenants are people too. Nobody likes it when someone is a jerk to you, and what goes around often comes around. It sounds like a Kindergarden rule…. but it’s important. One of SlateHouse’s core tenants is be honest --- it makes life a lot easier!