Managing your Tenant and Renewals

Although we recommend professional property management to nearly all owners some owners simply like to manage their homes themselves. Many owners are not as experienced with dealing with tenants. Miscalculation in this important area of management could cost an owner thousands in profits. Some common errors are befriending a tenant, approving unnecessary repair expenses, and giving too much of a concession to a good tenant.

Many owners become friends with their tenants over time. This is simply put - a bad decision. As the President of Synergy Real Estate, I prohibit my managers not to befriend tenants. In fact, I do not even want the tenants to like us. I do however want to treat them fairly and gain their respect. This important boundary implores the tenant to more closely performing as required in the lease. Many befriended tenants pay late more frequently, do not provide the appropriate notice, and expect you to take requests at all hours.

Proper tenant management also requires a firm hand in dealing with unnecessary repairs. Many tenants in the first month test the water with a barrage of unnecessary repairs. They are essentially seeing what you will approve and won’t. This is the point at which it is vital to remain vigilant but fair. It is a necessary repair to fix a broken sink. However, to shampoo the carpets after a tenant moved in because they were not clean enough is not. Also, you should always require that a tenant submit a repair request in writing. And most important - set boundaries and be firm.

Should you give a good tenant a discount in rent? The only time I would consider this is if I legitimately believed we would have to evict or lose a good paying tenant. This would also be contingent upon market rental rates when compared to the prevailing rate. At the end of the day, your goal is to maximize net income. You should not be concerned with being nice. You can donate money to charity any time you like. But a properly managed property should be run like a business. Would a grocer remain in business if they gave 30% off to each customer with a sob story? Be prudent and always make the decision that maximizes profit while maintaining your asset.

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