Good communication is one of the most important aspects of running a successful business. Whether you’re dealing with customers, employees, partners or vendors, clear and effective communication affects just about everything else.
In the landlord business, your customers are your tenants, and it’s vitally important to keep your communication as effective as possible. Not only does great communication improve everyone’s day, but it can keep the headaches to a minimum—and even keep you out of legal trouble.
Here are 7 tips to improve tenant communication:
- Be a good listener. Everyone wants to be heard. By focusing on what your tenants are saying to you, you’ll be better prepared to respond appropriately. Give them time to express their needs, wants and feelings, instead of simply sharing yours.
- Recognize different communication styles. Some tenants speak quickly and want quick resolutions. So, get right to the point. Others want more details and background, so give them more explanations. Some don’t want to know you as a person, and are happy to have a text-only relationship, while others want to connect with you. Take a little time to learn about tenants, and you’ll figure out their style.
- Share expectations. Be very clear about what you expect and need from your tenants. None of your tenants are mind readers, so if you want them to change their behavior, let them know.
- Make it collaborative. Say “I need you to help me with this,” or “how can we work together to make this happen?” Let tenants know you’re willing to try to give them what they want, but let them know what you need in return.
- Be polite. Say “good morning.” Call tenants “ma’am” and “sir.” Ask tenants if you can come in—even if it’s a scheduled maintenance visit. If their child is screaming, ask if it would be better for you to come back later.
- Be respectful. Treat each tenant with the same respect you give your lawyer, banker or your grandmother. Even if they’re giving you a hard time, you’ll gain far more in return when you treat tenants with respect and dignity.
- Don’t get emotional. Sometimes things get heated, but if you keep a cool head and remain professional, you’ll have a better chance of diffusing the situation and solving the problem.
Adapting to tenants’ communication styles, being polite and respectful, and sharing expectations will improve your tenant relationships. Better communication can lead to less stress, fewer tenant turnovers and better profits, too!
Start your tenant relationship off right by knowing who you’re leasing to. Protect your rental property and assets with tenant background checks. Proper tenant screening will ensure you are leasing to the best possible tenants.
Have you ever had an idea tenant? Would you be able to spot another one if he or she submitted a rental application? Keep in mind we’re not talking literally here. Appearances mean nothing when it comes to judging who is an ideal tenant. And, choosing tenants based on appearances can get you in legal trouble.
Rather, the following qualities and attributes make a tenant “ideal”:
- Ideal tenants have a rental resume, including references from previous landlords.
- They know how much rent they can afford.
- They don’t waste your time— they show up on time.
- They know their credit score, and are ready to explain any issues.
- Ideal tenants have saved up enough cash to cover the security deposit and first month’s rent, along with application fees, tenant screening fees, pet deposits and utilities deposits. Even better? They have several month’s rent in the bank—and the bank statements to back them up.
- Speaking of pets, ideal tenants don’t pretend to not have a cat, bird or dog. They don’t apply for rental units that don’t allow pets, and then try to sneak one in when you’re not looking.
- If pets are allowed, ideal tenants also have references from previous landlords for their pets.
- They fill out the lease application thoroughly and truthfully.
- Ideal tenants know that appearances do matter. Again, you cannot discriminate against an applicant based on race, religion, gender, family status and other factors. And plenty of landlords can tell you that tenants who look rough around the edges are often hard-working people who always pay their rent on time, while flashy dressers may live above their means and have credit problems. That said, applicants who take the time to dress nicely demonstrate respect and just might take good care of your property.
- Ideal tenants are excited about your rental property and look forward to making it their home.
If you own rental property in vacation areas, or a second home that you rent out, things may be looking up. According to a report from HomeAway, an online vacation rental site, 72% of vacation rental owners in markets where summer is considered peak season reported summer occupancy rates of 76% or higher. That’s an increase of 8% over the summer of 2011.
Not only were occupancy rates higher, but average weekly rental rates were, too. Average weekly rates were $1,493, or $213.29 per night. And 87% of vacation rental owners said business was the same or better than last summer.
The report also shed light on the importance of marketing vacation rentals. It states that owners on average spend over eight hours per week marketing and managing rental properties, and bring in an average of $26,000 per year in rental income. (The average HomeAway owner rents their property about 17 weeks a year for about $1,493 per week.)
How Vacation Home Owners Use Rental Income
- Like any income – for every day living expenses, discretionary spending, saving for the future: 43%
- To maintain or make upgrades to their vacation home – to purchase furnishings, perform necessary maintenance, paint: 59%
- To pay the mortgage on the property: 47%
Of those who use rental income to pay the property mortgage, nearly half (49%) said they’re able to cover at least three-quarters of it.
If you’re like most vacation rental owners, you purchased your property for personal use or a long-term investment. About half of owners say they spent from one to 28 days in their vacation homes, while 27% stayed more than a month.
HomeAway says the following markets are seeing a rise in demand and inquiries:
- Balboa Peninsula, Calif. (222% increase in inquiries during the second quarter of 2012)
- Reunion, Fla. (up 137%)
- Aspen, Colo. (up 124%)
- San Diego, Calif. (up 124%)
- Folly Field, S.C. (up 116%)
- Honolulu, Hawaii (up 115%)
- Kissimmee, Fla. (up 114%)
- New Orleans, La. (up 114%)
- Vail, Colo. (up 111%)
- Gulf Shores, Ala. (up 108%)
If you’re thinking of investing in a vacation home to rent out and enjoy for yourself, you might want to look into these areas, with significant increases in traveler interest.
The United States has long had a policy of promoting homeownership. Federal expenditures in the form of direct spending and tax subsidies benefit homeowners in all income brackets—including those who could afford homes without the subsidies.
Lower-income families typically spend more of their incomes for housing than higher earners. They also face other housing difficulties, such as instability and even homelessness, which are alleviated by rental assistance programs. However, federal rental assistance programs are currently reaching only one in four eligible tenants, due to limitations on funding.
Policymakers are introducing reforms to the homeownership mortgage interest tax deduction as an attempt to reduce the federal budget deficit. Some say the savings should be funneled to lower income renters in the form of a federal tax credit, administered by the states.
The idea is to provide credits to poor families so they can afford rental housing, to lift them out of poverty and positively impact children’s health and long-term development. Families would pay no more than 30% of their income on rent, while credits would pay the remainder. Landlords would be able to claim a federal tax credit on any rent reductions provided to families, or pass the credit to the mortgage holder in return for a reduction in payments.
Supporters say rental assistance can move the elderly or those with disabilities out of nursing homes and into housing that better meets their needs, provide support for families at risk of having their children placed in foster care and reduce homelessness among veterans and other at-risk groups.
The Department of Housing and Urban Development (HUD) provides housing assistance to families with children, the disabled and elderly, through the Housing Choice Voucher Program. The program is commonly known as “Section 8.” To qualify for Section 8, participants must meet certain income requirements. In general, the family’s income cannot exceed 50% of the median income for the county or city in which they live.
The tenant is then allowed to find a suitable housing unit; therefore, Section 8 Housing can be found in most neighborhoods, in most U.S. cities. Landlords may agree to rent their property under the terms of the program. Their rental properties must meet minimum standards of health and safety, and the rent must be reasonable when compared to market rents for similar units.
A family with a voucher is generally required to pay 30% of its income for utilities and rent, while the voucher takes care of the remainder, up to a set limit.
Some Section 8 vouchers are for specific housing, but most give the tenant the ability to choose where to live, with the landlord’s cooperation. Landlords have the benefit of receiving rent by the third of each month from HUD. Tenants must also pay their share on time, or face the possible loss of their eligibility.
Keep in mind that HUD does not conduct tenant screening or qualify tenants in any other way. Landlords must still do their due diligence and perform background checks, credit checks and criminal history checks, as they would on any other prospective tenant.
The voucher program has been shown to be very cost-effective, as well as to positively impact homelessness and housing instability for children. Families who are able to move to better neighborhoods often enjoy better schools and higher chances for employment.
No matter who pays the rent, you need to protect your rental property and assets with tenant background checks. Proper tenant screening will ensure you are leasing to the best possible tenants.
landlords have faced one of these situations:
- You’re doing a routine maintenance inspection and discover an occupant in the rental whom you’ve never seen before. You ask who he is and he replies, “Oh, I live here.”
- You sign a lease with one tenant. A few months in, she mentions that the rent will be late because her roommate hasn’t paid her share yet. Roommate?
- You live upstairs, your tenant lives downstairs. You notice he hasn’t been around lately, but someone else is clearly staying in the apartment. You ask questions and find out your tenant is away for three months, but he sublet the place to a friend.
- Tenants who live next to one of your rental units call and complain about the three cars that are taking up all the available parking. You reply that only two people live in the unit, but they assure you that three people have been seen regularly coming in and out.
What’s going on? Most likely, your tenant has brought in a roommate or sublet part or all of your rental property to an additional person. If your lease agreement states that no subletting is allowed without your authorization, then the tenant is in violation of the terms of the lease.
The problem with subletting, or adding roommates without your knowledge, is that you have no idea who they are, where the work, if they’ve ever been evicted or convicted of a crime, or if their credit history meets your requirements. Without a chance to perform due diligence, including tenant screening and credit checks—the same tenant screening you do on all prospective tenants—you are at risk of liability for the actions of an unknown person. Plus, your property and business are at risk.
Why would tenants deliberately violate the terms of a lease?
- Maybe they don’t thoroughly read the lease, or forgot what the lease said.
- They may think you won’t catch them in the act, as long as they pay their rent on time.
- Perhaps they think the lease terms don’t actually apply to them.
- Or they simply cannot afford their apartment or house without a roommate.
In any of these cases, you likely have cause to send a cure or quit notice. Of course, check your local and state laws concerning eviction notices. You may want to send a reminder to all your tenants that subletting or adding roommates without your authorization is strictly prohibited. If they want roommates, they must undergo the same application and tenant screening process as everyone else. Explain that this is for the safety of all residents. Keep in mind that treating one group of people differently than others could put you at risk of discrimination charges, so make sure the same rules apply to all of your tenants. Finally, notify tenants that violations are grounds for eviction.
If you do agree to a sublease situation, be sure to put everything in writing. A sublease agreement should be signed by all parties and place in your tenant’s file.
While renting to disabled tenants is common for many landlords and property managers, some have never had a disabled person submit a rental application. This post will clear up what might be some unknowns.
It’s important to know that disabled persons are protected by law. The Fair Housing Act (FHA) protects people with physical or mental disabilities that substantially limit one or more major life activities. These disabilities include mobility, hearing and visual impairments, chronic alcoholism, mental illness, HIV/AIDS and mental retardation. Landlords may not discriminate against these people, nor against those who have a history of such disabilities or are regarded by others as though they have such a disability (in other words, have no formal diagnosis).
- Landlords are not allowed to request medical records or ask prospective tenants if they are disabled.
- Landlords must not assume a prospective tenant cannot live in certain housing. For example, an applicant in a wheelchair cannot be told there are no vacancies if a third-floor apartment is available.
- Landlords may not turn down mentally disabled applicants on the basis of their condition alone. If they have threatened or harmed others in the past, then that could be grounds for rejection.
At their expense, landlords must accommodate disabled tenants within reason. This means adjusting rules such as where garbage must be placed or allowing a close-by parking space. Each of these would fall under the “reasonable” category. Installing an elevator so a tenant who uses crutches can reach an upstairs unit would not.
Disabled tenants must be allowed to make reasonable modifications to their rental units or common areas in order to live comfortably and safely. For example, a tenant with a wheelchair-bound child must be allowed to widen the doorway to the bathroom and install bars around the tub and toilet at their own expense. Furthermore, the landlord may not require the tenant to return the doorway to its original condition (since it does not interfere with the next tenant’s use and enjoyment of the premises) but may require the tenant to remove the grab bars and return the walls to their original condition.
Other examples of reasonable accommodations include lowering countertops in the kitchen for a tenant using wheelchairs, installing an extra-loud doorbell for a hearing-impaired tenant or altering appliances so a visually impaired tenant can use them. All of these modifications must be requested verbally or in writing, approved by the landlord and paid for by the tenant. Landlords may ask for the unit to be returned to its original condition upon termination of the lease.
Landlords are permitted to ask for a description of proposed modifications, along with proof they will be done according to the law and in a workman-like manner.
Have questions? Learn more with the U.S. Department of Justice and Department of Housing and Urban Development’s joint statement on the subject, which can be found here.