You may think it’s only the tenant who has trouble paying the mortgage, but as a real estate investor or landlord, there may be times when it’s hard to pay the mortgage on your end as well. Here are some tips you can do to avoid facing trouble paying your mortgage each month.
It’s not always possible, but try to keep your property occupied. While it may sound overly simplified, this is the life line of your business. It will guarantee that the incoming rent each month, will cover your property mortgage payments. That’s why it’s always important to advertise even when you have no vacancies. Tenants are required to submit a 30 day notice prior to vacating the premises, but that doesn’t always happen. It’s a good idea to keep a waiting list that potential tenants can signup on to be notified when an unexpected vacancy opens. It’s a bad idea to procrastinate on screening applicants or filling your properties just because business is good right now. Properties can go from being fill, to being half fill real fast. Recognize filling your vacancies as a major aspect of your REI business success and deal with it quickly and efficiently every time.
Don’t just find anyone to rent out your property. From a business point of view, they are your bread and butter. Would you trust your livelihood to just anyone? The potential renter will be the one paying your mortgage on the property, so finding the right tenant is vital to your survival. By “right” that means, they pay their rent on time, keep the property maintained and don’t abuse the lease. Background and credit checks are a must. This will ensure that you have the best tenants that will pay their rental fees, which will help you pay the mortgage when it comes due.
Try to reward tenants that agree to a long-term lease, by giving a percentage off the rent. However, just because their a good tenant, doesn’t mean that they will choose a long-term lease. Some good renters maybe in the military and can only agree to a month to month rental. Some good renters maybe in school or on a temporary job assignment. They may just be living in an area until their new house is move-in ready. Whatever the situation, opt for long-term renters when the choice is available. Doing so will make filling a vacancy at least a more infrequent possibility.
Please don’t be a slum landlord! Remember, we are in the people business, so treat them as such. Make sure you keep up with maintenance on your property. If you want good tenants, long-term tenants and tenants who pay their rent on time, do your part to keep them. Deal with maintenance issues quickly. Make repairs as necessary. Upgrade appliances or at least ensure the ones you provide are in good working order. Work towards hiring a property manager to run the place for you, which would free up your time for other things. If not, then make sure to respond to your tenants calls quickly. Always have someone experienced available that can watch the property when your unavailable or on vacation.
Being a good landlord will go a long way in developing lasting relationships with your tenants, which will in turn, help you keep them in your property longer. Often a tenant and landlord relationship can turn an average tenant into a great one simply because they want to keep that relationship intact.
In today’s economy, you need to always plan ahead to avoid facing trouble paying the mortgage. Unfortunate events happens to us all, even REI professionals and that usually means it hits where it hurts! These simple tips can help as you work to develop lasting, long-term, rent paying tenants to keep your properties bringing in the income you need every month.