The right tenant will save you 80 percent of housing provider headaches.”
• A fenced yard (upkeep is the tenant’s job). We avoid corner lots because the back yard is usually small. Pets are allowed if there is no carpeting because we can get higher rent and a pet deposit. Cats are fine, but no more than two dogs, and no aggressive breeds. • No swimming pools or hot tubs for liability reasons.
Long-term satisfied tenants are the key to making money. Ours usu- ally stay for years, largely because we treat them like we would want to be treated. They have our cell numbers and can call, text or email, and we fix problems immediately. We keep our houses in first-class con - dition. First-class properties attract first-class tenants. The formula: Buy good houses in good neighborhoods that attract good tenants. Do not skimp on fix- up. Respond to problems immediate- ly. Because of this, every one of our tenants pays their rent on time or early. They contact us if they might be late, which rarely happens. If it does, we do not charge a late fee unless it becomes a pattern. Because we treat our tenants like family, they stay a long time. One of our tenants stayed for 18 years, and she would still be there if we hadn’t sold the house. This is not a perfect formula. One of our recent tenants in an upper middle-class neighborhood was an oil company heir whose rent was by bank draft. What could possibly go wrong? We discovered that she was operating a brothel out of the house. We’re still learning new things about being housing providers! •
WHATTO LOOK FOR INA TENANT
The right tenant will save you 80 percent of housing provider head - aches. You will make more money and have fewer problems by leaving your property vacant for a month or longer while you find the best tenant than to rent to the wrong person. Every potential tenant completes our application. We have a friendly conversation, and if they pass our gut check, we use an online service that does a background report and charges the applicant. We want to be as certain as possible that they will be able and willing to pay rent and be a long-term tenant. Lying and/or skipping questions on the application are automatic rejections. One minor criminal conviction is OK if they admit it on the application. One person told us that he had been convicted of shoplifting. His crime? He stole diapers for his child. He became a great tenant. Our best tenants have been older divorced men. If something breaks, they fix it. They usually stay a long time because they don’t want to get married again anytime soon.
WHATTO LOOK FOR INA HOUSE Ask yourself if you would want to live there. If so, consider these phys - ical aspects of the property: • Number of bedrooms. We keep it to three maximum with a garage and/or basement. We don’t want more bedrooms because we don’t want an army of kids destroying the house. Larger houses are more expensive to maintain and are less profitable. Tenants often fill storage spaces and are more likely to stay if they have to pack all that. We love to see our tenants park in the driveway because there’s no room in the garage. • Newer roof, newer HVAC and modern windows. Those are the most expensive to maintain and replace. • Brick or other siding that doesn’t need paint. • Hard surface floors so carpeting doesn’t have to be replaced.
W. J. Mencarow is a real estate investor (including farmland) with over 35 years of experience. He offers a free e-course on real estate note investing at www.
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