Stop foreclosure before it starts
Sometimes it’s not just the tenant who has a hard time paying the rent. A real estate investor or landlord, especially during this pandemic, may find times when it’s hard to pay the mortgage on that rental. there are ways to lessen the impact of a tenant not paying rent. Here are some things you can do to prevent having difficulty paying the monthly mortgage payment.
Keep your properties full.
Sounds too simple and you could ask why would I want to keep my rentals full when the tenants aren’t paying? While it may sound overly simplified, this is the most obvious method for ensuring you’ve got some rent money coming in each month to cover your property mortgage payments. If the units are empty you have no chance. Don’t allow yourself to put off advertising for new tenants. And don’t put off screening applicants or filling your properties because you get busy or overworked. Filling your vacancies is a major aspect of your REI business success so deal with it quickly anytime you have a vacancy.
Do your best to find quality tenants.
While you want to keep your properties full, finding good quality tenants is key. It is really your first line of defense against lost rents and damages. By “good” it means they pay their rent on time, keep the property maintained and don’t abuse the lease. By using background and credit checks, you can find the best tenants available and thereby do what’s possible to keep your rental fees coming in regularly, which will help you pay the mortgage when it comes due. Please don’t fall into the desperation trap and take the first one that shows up with the deposit.
Look for long term tenants.
Don’t assume that quality tenants will necessarily be long term ones. Some good renters may know they can’t stay over a few months at most. They may be students or working a temporary job. They may just be living in an area waiting to move or retire somewhere else. We found that older single women worked well for us. We never had to worry about boy friends moving in or kids tearing up the property. Whatever the situation, opt for long term renters when the choice is available. Doing so will make filling a vacancy at least a more infrequent possibility.
Keep the property well maintained.
If you want good tenants, long term tenants and tenants who pay their rent on time, do your part to keep them. Respond to maintenance issues quickly. Make repairs as necessary. Upgrade appliances or at least ensure the ones you provide are in good working order. Respond to your tenants’ calls quickly, or if you can’t be sure they know you’ll be unavailable for awhile. We also asked our tenants a month before the lease expired if there was anything they would like done to the unit to help make it more their place.
Being a good landlord will go a long in way in developing lasting relationships with your tenants, which will in turn, help you keep them in your property longer. Often a tenant and landlord relationship can turn an average tenant into a great one simply because they want to keep that relationship intact.
In a tough economy, it’s important to do all you can to avoid facing the difficulty of paying the mortgage. That applies just as much to an REI professional as it does to the average renter. These simple tips can help as you work to develop lasting, longterm, rent paying tenants to keep your properties bringing in the income you need every month.