When I first became a landlord about 15 years ago, I intended to be the best landlord a tenant could ever ask for. I listened to my tenant’s stories. I allowed them to pay me “when they could.” I did all the repairs that were needed at my expense, even when it was they who caused the damage.
Of course, I lost a ton of money. What really bothered me, though, was the “thanks” I got when they left (usually without notice) — apartments and houses that were completely trashed, often costing me a year’s worth of rent (rent I hadn’t collected) to put in order.
Rental real estate is still a great business — one I highly recommend you consider getting into. But if you do, heed my advice and practice tough love with your tenants.
Here are my rules :
Write a tough contract — one that puts you completely in charge. Include the harshest provisions permissible by law. You don’t have to enforce them. But you will be happy they are there. (You must, of course, keep up your part of the bargain. In exchange for the rent you get, you should give them a clean dwelling in excellent shape. And you should keep it that way.)
Make it very clear at the beginning that you will evict them if they violate the contract in any way. Furthermore, tell them you will sue them if back rent and damages exceed the amount of their security deposit. Take a photo of them in the apartment to demonstrate the good condition it was in when they took occupancy. (Nobody else does this but me, as far as I know. It works wonders!)
Charge them penalties from month one. They must know you were and are serious about your warnings.
Evict them without second thoughts if they fall behind more than a full month’s rent.
When I got some of my family members into the rental real estate business with me five years ago, they objected to my toughness. I let them do it their way because I know that the only way to learn is from experience. They bent over backward being “good” landlords — and learned the same lessons I learned the hard way.
Needless to say, they now follow my “tough love” rules.