Landlords’ Dilemmas – Deposits, Pets & Credit Checks

Landlords’ Dilemmas – Deposits, Pets & Credit Checks

A Fix and Hold loan is ideal for the investor wanting to create a portfolio of rental properties. And so, with the dilemma of funding out of the way – with Freedom Private Money at the forefront – the rest of the process should be a breeze, right?

Not so fast. Being a successful landlord involves a lot more than collecting a bunch of money at the first of each month. Truthfully, to be a successful landlord you need successful tenants. What is a successful tenant? One that pays his rent on time, of course, but a whole lot more as well. 

A successful tenant is one that fulfills the terms of his lease. At least. A more successful tenant – in the eyes of the landlord – is one that settles in for the long haul, and signs a lease over and over, year after year. There is nothing better than the long-term tenant as far as your property management goes. 

Every time a tenant moves out and a new one moves in, your property and your bank account takes a little hit. It’s simply inevitable. Once the old tenant moves out, suddenly any little blemish is evident and you are repainting, and cleaning or REPLACING carpets! And, even with deposits, tenant damage is real. And sometimes it’s just normal wear and tear that you cannot rightfully charge towards their deposit. Moving tenants in and out will cost you revenue.

Experience has shown that finding the long-term tenant is worth its weight in gold. Offering a cut rate on monthly rent – just $10-$15 monthly discount can do this – can entice an exemplary tenant to sign a 2 or 3 year lease. And, it’s worth every penny to you, when you consider vacancy time, repainting and remodeling, etc. between tenants. 

When it comes to policies like pets allowed or security deposits, a middle of the road approach seems to work out best. A background and credit check is worth the cost and will weed out the riff-raff. But – allow for actual explanations if someone who seems stellar has a past issue. Listen to them, maybe give them a chance. Pets? Get a deposit. Pets are destructive. But people love their pets, and people who love pets are generally good people, and allowing them their pets on YOUR property will retain them as long-term tenants. And speaking of deposits – YES! Require a decent deposit .

Now you are in the position of owning investment properties, but remember, once you may have been a renter too. It’s tough! If you trust your gut and get the right renter in your property, you can have a great investment on your hands, not just the property, but your tenant as well.