How to Deal with Late Paying Tenantsby
My youngest brother is in the process of putting in a suite in his basement, and one of his biggest fears is getting a troublesome tenant. He’s not alone in having these fears … many of our newsletter readers are dealing with that exact problem right now. We received an assortment of questions about dealing with troublesome tenants in the past couple of weeks. Most of them specifically asked about what to do to get tenants to pay rent on time. A few weeks ago we also received a long email from a reader about property management, income producing property and tenants.
Why dealing with tenants is like dealing with a bad cold
Rather than share all the emails with you, let me just generally answer all of those questions and say that there isn’t a great cure for problem tenants once you’ve got them. I guess it’s kind of like a bad cold. There are things you can do to get better faster and there are pills to take to reduce the pain and suffering, but you still have a cold until you finally get rid of it. The best way to deal with colds is to avoid getting them in the first place. It’s the same for troublesome tenants – the best cure is prevention!
We’ve talked about this in the past, see 5 Steps to Rent out your Property, but let me add a few other points:
Set clear tenant selection criteria that comply with regulations in your area. Good criteria could be, for example, someone that is financially responsible, shows respect for the property, and is likely to renew the lease after a year.
Only show your property in good condition. Good tenants have options. Shabby looking units attract poor tenants. Sure, you may lose 2 weeks or a month of rent, but that may be MUCH LESS PAINFUL and MUCH CHEAPER than dealing with a troublesome tenant.
Know the market where your property is located (is it by a University or a certain large business). Think about your ideal tenant that would be attracted to living in that area and write an ad that will appeal to that specific person. If you have a nice bright unit near a University and you know it would attract students, write your ad to attract quiet and peaceful people that will be doing a lot of studying at home and will appreciate the peacefulness. Then, price your unit slightly under market rates to help attract a wider variety of applicants.
Hold an open house to show the property. An open house saves time, interrupts current residents less, and can increase the sense of demand for the property.
Run detailed background checks on any applicants that you’re seriously considering. Confirm their identity, call their previous landlords, verify their employment (we like to call the company they work for AND get copies of their recent pay stubs) and check their credit and criminal history. There are several agencies in North America that will do these checks for a nominal fee. A quick online search will help you narrow down one that is suitable for you. Or if you belong to a property managers/landlord organization like ROMS BC, you may get a discount on these checks.
Using the criteria you’ve established and all of the information you’ve collected, select your new tenant! Then, if you still experience issues with your tenants, be sure to act immediately, consistently and if you can’t solve the problem, move them out!
Published March 2nd, 2009