Great tenant is like your best employee. You are the employer who wishes to have an employee who could do his work efficiently. Similarly, if you are a landlord you will want to have a good tenant who can stay for a long term.
Good tenant is a very important factor that ensure your success in real estate investment. They not only take care of your property, they also play the main role of paying your mortgage on your behalf. They may stick to you for a very long term, thus, producing passive income for you over time. A tenant who take responsibility of looking after your property saves you all the trouble of taking care of the property on your own.
Well, the tricky part is how can you get a good tenant? A tenant who can be trusted, good payer and well-mannered. Simply, you have to set an interview along with a form that will be filled out by the prospect tenant. So, the process should be like getting a perfect employee to do a particular job. As a part of the interview, you have to ask the referees or his previous landlord. If you don’t do this, there is a tendency that the tenant might invent stories about his reasons for moving out from his previous house. So, you better check that out to ensure that he is telling the truth. As a landlord, you have the right to know more about your prospect tenants whether they are reliable or not. You got to ask about the nature of their jobs. It might sound like hard and tedious work but that save you the trouble of evicting a problematic tenant later.
Once you get a good tenant, you have to acquaint him on your rules and regulations. Great people are hard to find. If you’ve found a great tenant, it is worth the little effort to keep the tenant as long as possible. You can negotiate to impose only a slight rental increase if the tenant can take good care of your property as if it is his own property. The rental increase should be reasonable that it is worth not having to deal with the opportunity cost of having to get a new tenant. There would be a time that economic crisis would affect your tenant’s ability to pay rent. You can consider to give some discount of rental, but not to the extent that his payable accounts would accumulate for months. To establish a harmonious landlord-tenant relationship, you have to give incentive if they keep your property in good shape like. The incentive can be as simple as adding a new sofa. It should be a give-and-take relationship. Remember, generosity pays back a hundred folds.
So, if you are a landlord or you are planning to invest in rent-stabilized buildings, always treat it like running a business. The key is to have great people to work for you, that is the great tenants that would pay your monthly mortgage and not the other way around. Good tenant is key to long term passive rental income. In order to have great tenants, you have to be a great landlord also.
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