The first thing you should never do as a landlord is evict a tenant for nonpayment of rent, but eviction is a landlord's only recourse to ensure payment. The Supreme Court ruled the eviction moratorium was unconstitutional. The result of not allowing evictions was to put many landlords out of business. Even if you can evict, though, it's to be avoided most of the time, since doing so becomes a lose-lose proposition for everyone involved.
If you want to be a successful landlord, with responsible, happy tenants in your rental properties -- which doesn't usually happen in a vacuum -- landlords, like all small-business owners, need to be proactive to achieve success. That said, here are seven things you should never do.
1. Ignore a tenant's request for repair
Mom-and-pop landlords have plenty of competition, such as apartment buildings with fancy amenities and institutional landlords who buy the same properties we want.
But what most mom-and-pop landlords have that the big guys don't is the human touch. So whenever a tenant reaches out, you should always respond as soon as possible. If a repair needs to be made, it's in everyone's best interest to get it done in a timely manner.
Not only must you have a property that meets a federal law called the "implied warranty of habitability" (meaning your property needs to be in livable condition), you will strike goodwill and possibly loyalty in your tenants by being a responsive landlord.
2. Rent to people without first screening them
Selecting tenants is one of the most important decisions you'll make as a landlord. This choice could determine whether you make or lose money. Your goal is to rent to people who'll pay the rent on time every month and take care of your property as you would.
You can help accomplish this by screening every applicant by running a credit check and background check and by interviewing past landlords.
Note: You can successfully rent to self-employed applicants by asking to see six months' worth of bank statements, tax returns for the past two years, and a bank account that contains at least three month's worth of rent.
3. Give a notice to vacate before the lease is up
Let's say you've decided to sell the property, or you or a family member wants to move into the rental property. You have a tenant, however, with a signed lease who is occupying the unit. In this case, you can't ask your tenant to leave midlease if they haven't committed any lease violations. That means you need to wait to sell, sell with the tenant occupying the rental, or tell that long-lost aunt to look elsewhere.
An exception would be an early termination clause in the lease. Such clauses typically have language to the effect that the lease will terminate (typically after 30 days' notice) upon sale of the property or if the landlord wishes to take back the property to live in it.
4. Try to enforce a policy that's not in the lease
It's important to have a lease because it's the contract that both landlord and tenant must follow for the entire lease term. If your tenant regularly pays rent late, for example, you can't start arbitrarily charging a late fee unless you have language in the lease that addresses this.
5. Come in unannounced
You own the property, but once you rent to someone, it becomes their space, meaning landlords can't just pop over whenever they like. Landlords need to give proper notice before coming over (usually 24 hours). And there needs to be a reason for the visit, such as to inspect the property (see No. 7 below), enter in the case of emergency, make repairs or improvements, or show the premises to prospective buyers or tenants. Other than that, landlords should leave their tenants alone.
6. Charge a tenant for normal wear and tear
The issue of the security deposit is often one of contention. Landlords can keep all or part of it to pay for repairs made necessary by the tenant's actions. But landlords can't keep any of the security deposit to pay for normal wear and tear, which occurs from the tenant using the property for its intended purpose.
In other words, landlords can't remodel the property on the tenant's dime. Unfortunately, wear and tear is a somewhat nebulous concept. Here are a few examples to help put this in perspective:
- Wear and tear would be curtains faded by the sun. Excessive damage would be cigarette burns.
- Wear and tear would be water-stained linoleum by the shower. Excessive damage would be broken tiles in the bathroom.
- Minor marks or nicks on the wall would be normal wear and tear. Large marks or holes in the wall would be excessive damage.
Note: Landlords should always take before-and-after photos and/or video of the property to show proof of condition.
7. Never inspect your rental property
If you never inspect your property, problems that could have been easily fixable when caught early could become huge problems: for example, that strange water stain on the ceiling (which keeps getting bigger) or that unapproved dog who enjoys chewing baseboards.
Most landlords conduct move-in and move-out inspections to determine whether the tenant left the property in the same condition as when first rented, taking into consideration normal wear and tear. But landlords should also check on the property sometime during the lease term. It's typical for landlords to inspect once or twice a year, or even quarterly (after giving the proper notice for the inspection -- usually 24 hours' notice).
The Millionacres bottom line
Landlords wouldn't be in business if it weren't for tenants. Tenants are your customers and should be treated with respect. By having a solid lease and keeping your end of the bargain, you'll have created an environment that can lead to a successful landlord-tenant relationship.