Tricks of the Trade
As a full-time Canadian real estate investor, we will both have short-term and long-term holds which generate both massive and passive income. With a typical long term hold, a lot of investors get themselves into the dubious position of being a landlord.
To create a better landlord-tenant relationship, and thus a better situation, there are a few tricks that you can utilize to decrease defaults, maintain longer tenancy, and be able to put the have responsible people in your units.
The first trick to getting the right person in your unit is to screen properly. In a previous article, I outlined a number of screening processes, but just to highlight a couple:
Spend the least amount, but the most quality time qualifying potential tenants over the phone:
Mention early in the conversation that there will be a $25 or even $50 application fee. Most of the “riff/raff” will hang up after hearing that. The ones that ask why there is an application fee, you tell them that you need the money to do a credit check and a criminal check. Then you ask “will there be a problem with that?” If the tenant says no, that is no problem, and then you possibly have an excellent tenant on your hands. You can also tell them that the money will be refunded to them if they are selected as the “winning” tenant for that unit. The others will simply hang up and they will never bother you again.
Always ask for references of both employers and prior landlords. Make sure you call them all! Finding out how much a person makes, and how long they have been on their job, as well as how long they have lived in their prior properties. This indicates stability, and goes a long way in describing their character
The second trick is in the maintenance of your property. Every property requires regular maintenance including cutting the grass, snow removal, and the taking out of garbage. You may or may not have a tenant that is willing to take on all of that. One thing I do in the winter is, if no one has been designated as the official snow remover, in a common area I will put a shovel, a bag of salt and a broom. Quite often, the tenants will take it upon themselves to each take a turn at sweeping the common area, removing the snow, and salting the sidewalk.
The third trick I like to utilize is repair incentives. Repair incentives can be used when a tenants has no repair requests for a year. Give them back money if they have not submitted a repair request provided that they have actually repaired the little things that may have gone wrong during the year.(make sure you inspect the unit first!)
Happy land lording!
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