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Is Your Rental Ad The Reason You Aren’t Getting Calls?

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Your Rental Ad Sells Your Rental For You

A good rental ad makes all the differenceI don’t think all landlords are lazy, but I’m constantly amazed by some of the rental ads I see online for rental properties. It’s like the writer took thirty seconds to put down a couple features of the property and thought they were done.

News flash, you’re not.

This is front and center for me right now as I have a vacancy at a property that is a two hour commute from me. I need to write an ad that attracts the type of tenants I want to rent to and that sells the property as I don’t want to make twenty or thirty trips up to meet people!

The good news is here is what my competition has in their ad (sorry if this belongs to you)

built in 2012, modern, includes washer, dryer, fridge, stove, dishwasher, microwave central vac. lots of parking, close to downtown, parks, hospital, highway 2a. lots of storage, basement area for extra room

It has five pictures and the main picture is an external shot of the townhouse complex with no indication of which unit it is and it actually looks very similar to the place I’m renting, but they didn’t put too much effort into selling it in my opinion.

It took me almost two hours to write my ad and although it’s not perfect, I’m pretty happy with it and I’m already getting a great response to it. Here’s how it reads.

Looking for a modern three bedrooms place to call home? This three bedroom two and a half bath property is going to make someone a beautiful home, so why not you!

The three good sized bedrooms upstairs are bright, have large closets and are perfect for a new family or someone who needs a little more space. With a full bath on the upper level and two linen closets, storage won’t be an issue, but even better is the ensuite off the master!

Yes, the master bedroom has it’s own full ensuite with tub and shower giving you the privacy and quiet place you need. Plus with the huge East facing windows in the room, you can wake up to the sun shining in every morning making it the favourite room of your house! What an incredible way to start your day.

The main floor is ideally set up with a welcoming living room as you come in the front door with plenty of room for entertaining or just a relaxing night at home after a busy day. Then as you walk through the main floor, first you’ll see the half bath on the main floor tucked away to the side, then further in is the wide open kitchen and dining area and the two french doors leading to the back deck that let summer in and provide you a quiet oasis to unwind on.

The secluded back space is shaded by several beautiful pine trees and helps make you feel like you are out in the country and away from the city. Plus, it provides a great place to BBQ and relax after a day’s work.

Finally, the lower basement level is ideal for storage. As an unfinished space it’s a large blank canvas for you to set up and organize as you wish and giving you roughly 700 square feet of storage. Of course you’ll want to leave a little room to take advantage of the washer and dryer that are included which means no more trips to the laundry mat and more home time for you.

Built in 2007, this modern townhouse is approximately 1,400 square feet and has everything you need. From the included washer and dryer to fridge, stove, built in microwave and even a dishwasher, all the conveniences to make this a home you love are here.

Being located along 55th street and beside 56th Ave, the location is ideal for a family. The High School is located just a few blocks West and the elementary and Catholic schools are located just a few blocks East of the property making walking to and from school quick an easy. Add in the several nearby park and fields and your kids will love the area.

The particulars. This is a non-smoking property and unfortunately we don’t allow pets. We are very particular and we do full credit and reference checks on tenants before a lease is ever signed. We are initially looking at a six month lease and at the end of the six month term will look at a yearly renewal.

Now for the numbers. Rent on this fantastic three bedroom two and a half bath home is $1,395 per month and we require a matching security deposit plus the first month’s rent before moving in. Utilities are extra and will need to be put in your name.

We are currently repainting the interior and expect this property to be available as early as the November 15th, but can also work with a December 1st occupancy.

We will be onsite again on Thursday November 13th from noon until 3, so if you are available to view it, you should email us right away, or you can call or text Bill at xxx-xxx-xxxx. Note this is a long distance call from Xxxxxxx, but if you text me I can return your call as soon as possible.

This highly desirable property in a great area will not last very long so if you are interested and would like to come for a viewing contact us ASAP.

So which property would you want to see? I have ten pictures (the max allowed) and my main image is the kitchen picture at the beginning of the article. Why the kitchen? Because the kitchen typically sells the property. The picture below is another image I used that gives an idea of the space.

Ads and images for your rental property help you rent faster

Painting A Picture

Part of my goal with my ad was to create a picture of a home that someone wanted to live in. I didn’t want to just tell them I had appliances and I was close to a few things. I wanted them to know what I was close to, how the property was laid out and to present an experience.

I believe I mostly achieved that, but when compared to the competition, it wasn’t hard. So the question for you is, which one would you want to go look at?

It was almost a year ago I received an email from a very nice lady down in Texas that was having problems filling their vacant rental property. She’d sent a copy of the ad and I made several suggestions to help her re-write the ad to make it more appealing.

In less than a week she sent the new ad and I wanted to go rent the place it was so well done! Their phone didn’t ring off the hook, but it definitely picked up (the area was pretty tough at the time for rentals), which goes to show the difference a good ad makes.

Now please don’t take this as an offer to send your ad in for help writing your ad!! My time is too limited and I’ve apparently set a bad precedent by being so available to everyone for questions and answers.

The important lesson from this article for you will be too hopefully learn a lesson about what you can do to help market your property to get more showings, get better tenants and get your vacancies filled faster.

Yes it requires going that extra mile, but the return is well worth it! And don’t forget to let me know which one you’d rather rent?

Five Lessons From My First Tenant Eviction

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Lessons I learned From Evicting A Tenant - tenant evictionEventually, it happens. You run into your first bad tenant which leads to a tenant eviction. Unfortunately, this usually happens more often in your beginning years as a landlord. Right when you have the least extra cash flow and the most faith in humanity.

Now not to say it happens to everyone, and not to say all hopes for humanity are dashed, but the first time you run into a tenant that has no qualms about not paying you, leaving a mess behind and simply carrying on with their life is the time you start doubting why you are in even in this business.

Fortunately though, I have some tips to help you either avoid that first let down, cut down on the drama associated with it and save you some headaches. Would you like to find out about them?

Tenant Eviction Lesson One

A breach of your lease is serious business. Whether it’s non-payment, damage to the property or something even more serious. Because it’s serious, you need to take serious action and make sure a) the tenants know this isn’t how it works, and b) you need to start taking the appropriate action to evict the tenants.

One of the biggest issues I see with new landlords is they end up being compassionate, often too compassionate, and the one month’s outstanding rent ends up becoming two or three month’s outstanding rent and then the landlord discovers it can take an additional one to three months to get a tenant out.

What might have been a $1,000 decision now could be $6,000 with little hope of ever collecting.

You’re far better off being serious, starting the eviction and then cancelling it if you do manage to get paid, rather than hoping the tenant comes through. The other important point from this is it sets the precedent.

If the tenant sees you won’t let them get away with non-payment or any other breach they will see you treating this like a business and hopefully not let it become a pattern. Now, when it comes to non-payments in my locale, if the tenants pay before the date they are to be out, the eviction becomes null and void.

I tell them this and I also explain I am doing it to cover my ASSets. If they make the payment, no harm, no foul. If they don’t I am already well into the process of having them removed.

Now I mentioned these are lessons I learned from my first eviction, this is an example of something i learned afterwards. I expected other people were like me. Honest, respectful and that they would honor their commitments. I was wrong and ended up evicting these people a couple days before Christmas back in 2004.

I then spent the majority of my Christmas break, which I intended to spend with family, repainting a property, fixing holes in walls, repairing damages caused my neglect and cleaning floor, counters and bathrooms. All on a property I had just finished doing all of this on less than six months prior.

Don’t learn the hard way like I did!

Eviction Lesson Two

Tenants lie. Now don’t take this as a blanket statement, but when it comes to someone facing an eviction and the possibility of  living on the street, making up a small fib about paying the landlord doesn’t seem so bad.

You want to believe them, but you’re running a business and you need to remember that. Accept what they are saying at face value and move forward with the hopes that they come through, and many often do, but at the same time, don’t delay moving forward with an eviction or with the appropriate steps to take control of your property back as quickly as possible if it goes sideways.

This lesson I was first introduced to when I was continually promised a payment and wanted to believe them, but I was ultimately let down. Over the years this has been reinforced many times by people I have tried to help, only to discover no one was helping me, they were just looking after themselves.

Eviction Lesson Three

controlling your propertyRegaining control of your property should be your priority. When you get caught up evicting a tenant it often becomes about the outstanding money. This is understandable especially if it’s several months rent that never made it to your bank account.

Don’t get caught up in the money because the reality is you will likely never see it. If things are so tight for them they cannot pay rent, where will any extra money to pay you back come from? That’s why it’s so important to take immediate action as the longer you wait, the more you can be out.

Your priority should instead be to get back control of your property so you can once again turn it back into a positive cash flowing situation. Focus on getting the tenant out as quickly as possible using the rules and laws in place in your area.

Some places this can be tougher, some areas are definitely pro-tenant and the process can be long, slow and unfavourable to you as a landlord, but bottom line your goal should be to get the tenant out and the property back in your control.

In my case, I was able to get my property back just before Christmas and that gave me the gap between Christmas and New Years to get it repaired, repainted and re-rented and in our case I had it back and rented out within the first week of January. I went from losing money every month the tenants didn’t pay to having it rented out again with cash once again flowing the right direction.

It’s important to remember, once you have control, you have so many more options. You can get any renovations or repairs done if they are needed, which usually doesn’t make sense to do when the bad tenants are still in place. You can decide if this landlord business is right for you or not and either get ready to find better more suitable tenants for the next go around, or you can start preparing to sell.

But many of these decisions are delayed for you unless you have control of the property and get those tenants out.

Eviction Lesson Four

Knowledge is power. Understanding the steps involved in evicting a tenant is actually very powerful and many landlords I’ve walked through the process locally tell me it’s actually empowering.

It’s human nature to be fearful of something new and the first time we have to go through the process of evicting a tenant it’s not only a new experience, but also very stressful.

Your mind is filled with concerns your property will get destroyed, you’ll never be able to get the tenant out and that it could potentially cost you a fortune. All with the pressure of not knowing when or how long this could go on!

Granted, in some areas the process is much easier than others, but learning the process early is much simpler than having to do it under the pressure of a time sensitive eviction.

So where do you get this knowledge?

You can start with some of your local government service offices. They often have a consumer landlord tenancy agency or hotline that can provide you some information. It is usually the extended bureaucratic version, but it provides a starting point.

From there you might want to research local apartment or rental associations for landlords. They can be a great resource for first time landlords. They also should have tons of information regarding evictions, leases and everything in between that you can use to improve other areas of your landlord business.

The majority of these associations require memberships for complete access, but they often have lots of free information to help you move forward.

Finally, other landlords in your area. Networking with other landlords can be very advantageous for everyone involved. Locally it can provide you with changes in local laws or upcoming new rules, on the bigger scale it can be a resource for you to learn and make the job of being a landlord easier. (Never mind the opportunity to share this website to your new associates!).

This is part of how I learned to do my first eviction. I was a member of a local Real Estate group and sought out several of the members to get some guidance. By networking independently of the group my wife and I formed some life long relationships with some great people who we are glad to have as friends and fellow landlords.

Knowing how to evict a tenant isn’t knowledge you really want to have, but if the situation comes up, you’ll be happy that you do have it.

Eviction Lesson Five

Watch your property during an evictionKeep an eye on your property, especially the days leading up to the eviction date!

Depending on how the eviction went, you could end up with some vindictive tenants, after all it’s never their fault they couldn’t live up to the agreement they signed with you, it’s only your fault for evicting them.

One of the ways they can be vindictive is to leave all the doors and windows open when they move out in the dead of winter. Much like my first evicted tenants did. Patio door wide open too along with every light on.

Now back then I didn’t know to check out the property earlier (and sometimes the damage is already done by the time you get there) and we were lucky enough the downstairs tenant arrived home to tell us about it. Before he called he went through and closed all the windows, turned out the lights and closed the door(s).

I now warn landlords to even just do a quick drive by of their property leading up to the day the tenants are supposed to be out, or in the case of a suited property, I keep the other tenants in the loop as to what is going on so they can be my eyes and ears on site.

If you’ve also established good relationships with the nearby neighbors you can let them know what is happening as well. Some landlords become concerned that the other neighbors will think less of them for having a bad tenant, but more often than not they respect that you are taking action and keeping them informed.

Your property is a huge investment and spending a little time driving by, chatting with the neighbors and keeping other tenants in the loop just helps you protect your investment.

Anything Else?

Well, there’s probably another half dozen warnings I could throw your way, but consider the lessons above as your priorities. Of course, much of this can be avoided by making sure you screen your tenants diligently before you ever hand out keys.

From there you also want to make sure you have a written lease that’s valid for your area. It’s another pitfall that new landlords fall into. Without a written lease, you leave far to many loopholes that a bad tenant can take advantage of, so make sure you have a lease and again, one of the networking groups is a great place to look for these.

They may not be perfect, but they are a starting point.

So, my question for you. Have you had to evict a tenant already? If so, have you run into any of the problems I described? Or are there more you could add? If so, I would love to hear them, leave me a comment and share them with the others and we can form our own little landlord community.

 

Getting Back Into Hot Water With Your Tenants

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AKA – What To Do When Tenants Have No Hot Water!

tenants hot water tank brokeEveryday’s an adventure when you’re a landlord! Especially when a somewhat important part of your property breaks down and a tenants are mad.

The quick intro is I had a hot water tank go down, it didn’t burst a leak, it just wouldn’t stay lit. If it doesn’t stay lit, the water doesn’t get hot, if the water doesn’t get hot, the tenants get upset, I had an upset tenant.

Now for the extended story!

Why It’s Good To Have Contractors On Speed Dial

You never know when or what will break and that’s why it’s important to have people to call when things eventually do stop working. Whether it’s a fridge, a furnace or a hot water tank, over the years I’ve gathered a group of dependable people I can call in case of an emergency.

Last week was no exception, except for timing.

This is the part that’s problematic as a landlord. Timing.

It was last Wednesday just before 10 at night I got the text from the downstairs tenant at one of my properties that the hot water tank was out. It was pretty unlikely it quit at 10, it probably quit sometime during the day, or even first thing in the morning and I understand it’s not something they may know immediately about, but from a cost effectiveness stand point, I wasn’t going to call a 24 hour plumber to show up at midnight and pay huge charges for what I suspected would be a small problem.

That’s where the timing appeared to go down hill.

The next morning at 8:30 I called our favorite plumber and explained what the problem was. Much like triage in emergency, he had to decide where my “emergency” fit in his day and since he had two people with no water, I came up as number three on the list of importance.

This I understand, but the next problem was, he also had two other appointments he couldn’t change the next day, so things looked tight. But he was going to get back to me later in the day, once he found out how long or how short the other jobs would be.

So I settled down and by late in the afternoon, I still hadn’t heard from him. Now I wouldn’t say panic set in, as I know not having hot water can be a pain, but it isn’t life threatening, but then the upstairs tenant texted me.

I Was Given The Ultimatum

He wasn’t happy. He also informed me that going 48 hours without hot water was unacceptable. Now this is where things could have gone horribly wrong, and it’s also where the lesson comes.

First, to my knowledge at this point it wasn’t 24 hours, it was less than 18 hours earlier I first found out. So maybe someone there forgot to tell me the day before?

So rather than taking a defensive aggressive stance, (and this is what I also recommend you do), I defused the situation by agreeing with him, explaining what I was doing and going as far as to explain to him that if I hadn’t heard back from my plumber by noon tomorrow, I would either bring someone else in or personally come fix it myself.

That’s when he gave me the ultimatum of either it was fixed tomorrow or he was bringing someone in at my expense.

If you know anything about hot water tanks, they aren’t extremely technical products. Usually there is only a couple of things that go wrong and they typically can be fairly inexpensive to fix. However, they are awful expensive to replace and it’s often easier for someone to recommend a replacement than to simply do some quick trouble shooting or even replace a cheap part with fingers crossed.

The last thing I needed was for the tenant to bring someone in and to get a $1,200 bill for the installation of a new hot water tank, so again I reassured him it would be dealt with. I called my plumber again and ended up in voicemail, so I left a quick message explaining where things were at.

Why We Love To Work With The Same People Over And Over

Finally around 6:30 that night my plumber called me, he had just finally fixed the second emergency and wanted to come to the property to check the tank. Whew.

As I mentioned earlier there are typically only a few parts that quit on hot water tanks. The most common is the thermo couple which simply triggers the gas flow as it cools down. When it doesn’t work, it doesn’t trigger and hence, no hot water.

Thermocouples are not expensive. they are usually $20-30, which is way less than the cost of replacing a large tank! They are also not hard to replace.

They can usually be swapped out in 15-30 minutes, so my fingers were crossed.

By 7:30, my plumber called me back to confirm yes indeed it was the thermocouple and everything was back up and running, life was once again good and the tenants were happy.

Now as I mentioned, it only takes about 15-20 minutes to change the thermocouple, so why did it take him an hour? Well again, this is why it’s important to have trusted go to people you deal with.

After he changed the thermocouple out, he didn’t want to leave. He wanted to make sure it stayed lit and the tank heated up properly. So while he’s waiting, he hears water running in the toilet. When he questions the tenants they say it’s been like that for a while!?!?!?!?!?!? Sigh.

So he proceeds to replace the flapper and saves me money in the long term. By the time he’s done he’s able to check the tank, it’s still lit, the water is getting warm and his job is done above and beyond the normal call of duty.

The TakeAways

So what did we learn from this? Well first, you really need some trusted contractors. This can be hard as so many of them come and go, so many just aren’t up to snuff and so many simply rip you off.

But when you do find a good one, you need to make sure you hang on to them for dear life! I refer all of our contractors/repair folks to people all the time. I need them to stay busy to stay in business and to get tons of referrals from me so they in turn look out for me whenever they can as well.

Second, you shouldn’t power trip on your tenants when they get their backs up against the wall. Did my tenant have a legitimate beef about the hot water. Well, I can understand his side, he may not have know I only heard about the problem late at night, he may not have known I was actively working on it and he may not have known I really was trying to get it fixed.

I could have put him in his place, I could have matched his aggression and called his bluff (currently we have less than 1% vacancy rates in our city, so I would have very little problems replacing him and most likely at a higher rent), but I took the high road and worked with him and explained I was doing everything under my power.

This is part of the landlord business that landlords need to understand. You want to work with your tenants as good tenants can make your life easier. Getting angry back may have made me feel better momentarily. I could have shown him who was boss and that I was the property owner and that he had no right to question me, but it wouldn’t have served anyone.

In the end, he was ecstatic with the plumber coming after regular hours, he was happy with me for getting it dealt with and he will most likely be a very content minimal problem tenant for as long as he stays with me, because he knows I am being pro-active and dealing with any issues.

So, have you ever found yourself in similar circumstances? If so, how did you deal with it? Could you have dealt with it better? Let me know your thoughts on how I handled it and if you found this helpful for future reference!

Another Satisfied Tenant – NOT – Dealing With Bad Tenants

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You Can’t Win Them All

tenant defaces rental property - bad tenantIt happens, you get a losing hand in poker, you pick the slow line at the checkout, you pick a bad tenant.

It’s a matter of the numbers, in my case, more tenants equal more numbers and more chances for something to go off the rails, but the important part is you have to deal with the repercussions and move forward.

The image here is an example of a repercussion that I found yesterday upon arriving at one of my weekly furnished rental properties and is an an example of what can happen when you’re dealing with a bad tenant.

Etched on the top of my wooden coffee table were the words “Bill is a slumlord“. Just out of the picture is some additional graphic art including a swear word and random drawings. It was left by a tenant who had pushed my buttons too far and I evicted.

Yesterday was not a good day to talk to me…..

But today’s another day….

So I searched for the lesson from this, and initially there was none. Just frustration, disappointment and anger. Did I mention it wasn’t a good day to talk to me?

Today’s Another Day

The headline above may just be part of that lesson. It really is another day.

Part of the reason I evicted the tenant was he was continually late with rent, another was he was apparently incredibly messy and with this house being a shared accommodation, everyone has to clean up after themselves or it all falls apart.

When one person doesn’t clean up it deteriorates quickly. I’d left notes explaining things had to change, but they hadn’t.

I asked everyone who they believed the culprit was, but apparently their is honor among tenants and no one would point a finger, until a few days before I told this guy when his last day would be. One of the new guys said he was tired of the mess and confirmed my suspicions.

So anyway, I was to meet the departing tenant yesterday at noon, but instead found this, found the front handle on my door was broken off, my front light outside light cover taken off and smashed on the front sidewalk, a general mess of spills on the laminate floor in his room and of course, the lovely etching. What a lovely fellow.

Bad Tenant, But Big Picture

In the big picture it’s not a huge dollar expense, but it’s the time and energy to fix it that gets disappointing. But what hurt the most at the time was the frustration that he felt I was a slumlord.

Here’s a picture of the room normally, does it look like a slum to you?

Furnished Rental living room

Clean Up Day

With furnished rentals, it’s important to keep them filled, so my wife and I returned today to get everything cleaned up, to take the coffee table away to see if we could repair it and to get things back to clean.

After a couple hours of cleaning, it’s like a new place! Not back to where it was before this fellow moved in, but far closer.

And it was also where the lessons started showing up.

When we arrived, the table was still etched and the fellows room was still a mess, but the kitchen counters and kitchen table were all clean, neat and tidy. One or more of the other tenants had stepped up and cleaned up partially at least.

Since I had a very good idea of who it was that had done most of it, I texted the other tenant before I left just to inquire who had been cleaning and he admitted that he was tired of the mess. When I informed him we had spent the last several hours cleaning, floors, walls, taking garbage out and doing dishes, he was extremely appreciative and that was the important lesson!

Where we had one tenant who was so bitter and angry he defaced my property, I had another that was thankful for what I offered and for stepping up and those are the tenants we as landlords need to find and work towards keeping happy.

Good tenants are the lifeblood of our business

and bad tenants suck the life out of our business.

Having had over 1,000 tenants over the last ten plus years it’s amazing how many of the bad tenants seem to stand out, yet they made up such a small portion of the big picture. Yet of all the tenants I have had through, 90% have been  good and 5% I dare say were simply awesome.

We Need To Focus More On The Awesome

We can’t let the bad experiences rule our lives. If you’ve had a bad tenant you know it can be a slap in the face and it causes many landlords to give up, to walk away from the business, their dreams and their original plans. We, YOU, can’t let that happen and when you have bad experiences chalk it up as a learning lesson.

Take something from your experience and see how you can apply it to future tenants or future interactions.

For me, I’m not sure what or how I could have dealt differently with the tenant at this point, but I could have made the other tenants happier sooner by acting earlier. I have to chalk part of this up to some bad apple, but I know I’ve had so many great apples the positive has to outweigh the negative.

Have you had a bad tenant experience? Want to share it below along with any lesson you learned? If so, I’d love to hear it!

Raising Your Rents, Without Raising the Roof

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Increasing Your Rent Without The Ruckus

Rent increases - positioning them with tenantsLast article I talked about how stupid we tend to be as landlords. We have a great property, we treat our tenants well and yet you still feel bad about raising your rents to help cover our own increased costs.

Tenants understand costs increase, they know taxes go up, the can relate to increased insurance costs, but what they won’t tolerate is greed or abusive rent increases. It’s a pain in the butt to move, but if they feel wronged, it’s worth it to them.

On the other hand, if they feel like they are in a good spot, the increase won’t put them in the poorhouse and perhaps most importantly, it’s a fair rent increase, they typically have no problem staying. As always, it also requires common sense.

If vacancies are skyrocketing and rents are dropping everywhere else, you can be assured your increase will definitely have a higher chance of causing them to bolt. So know your market and understand the local laws and regulations regarding increasing the rent you charge your tenants and increase it when applicable.

Because when or if the market does slow later and you have a vacancy, you will definitely have to lower them to keep attracting tenants.

It’s All About Positioning

I was recently coaching a landlord through this and it all starts with positioning. She hadn’t raised rents for several years and was missing out on as much as $300 per month of additional rental income. Her current tenants were good, so throwing a $300 increase all at once at them was going to be a little unfair.

After all she didn’t want them to leave, she just deserved fair value for her property.

The lesson from that is, if you are paying attention to your local rental market, you’ll have a pretty good idea of the local vacancy rates and whether rents are increasing or not. If you pay attention to this, you can deal with more gradual increases which benefits both the landlord and the tenants.

When it comes to a strong rental market with vacancies dropping and demand for units increasing, it’s very important for you to be paying attention to how the market is changing. You need to have an idea of how much rates are increasing so you don’t get left behind and this is also where your positioning starts.

When I refer to positioning, I’m talking about putting yourself in the best light. The position that helps you, while at the same time puts you in a position to still provide good value for your tenant.

In this example, if you’re finding rents have gone up $100 per month for properties equivalent to yours, you start off with that in your written letter to the tenant. Now I’ve always advocated trying to get top dollar for your property initially. I believe having one of the nicest rental units in the area helps set you apart, helps get you better tenants and helps you garner higher rent.

You may already have been $100 higher to start with if you followed this process and if you are, you’re in a great position. Because you don’t have to raise your rents $100 this time, if you show your tenants how much others have raised their rents and end up only raising yours $50 or even $75, you’re still the good guy.

If you haven’t been following this process, you can still use this technique, but you won’t be quite as far ahead, but an increase is an increase!

Sample Letter of Rent Increase

So let me give you an example of some wording you can use, and feel free to copy and use this where you need to!

As you’re most likely aware local rents have increased over the last year as the costs of everything from taxes to insurance have increased. After doing some research we’ve noticed rents in this area have increased by $100 per month and in some places even more.

Now while we value you as tenants, we need to cover some of our increased costs and remain competitive in the market. So rather than giving you a big $100 jump per month, we’d like to reward you for being good tenants and only increase the rent by $75.

At this price, you are still getting the property for less than similar properties in the area. We hope you find this fair and again, we really appreciate having you as tenants.

How does that sound? Does that make sense to you?

You’re starting by talking about increased costs. You segue to rents increasing by $100, and possibly more and then you increase the rent by less than the average coming out as as the good person.

You’ve positioned yourself as not only looking after your interests and trying to cover your costs, but also letting them know that you value them and that you’re trying to help by not increasing the rent as much as you possibly could.

Now depending on the market, you’ll need to change the number where they’re bolded to the appropriate values, but that’s part of your homework. Now just to make sure you get the impact of this $75 per month increase, you have to understand it becomes an extra $900 over the course of the year and that $900 can cover a lot of your costs. If you have a suited property and increase both suites by $75, that’s $1,800 to your bottom line by the end of the year.

If you haven’t raised your rents in several years, rents may have increased by $200, $300 or even more per month since the time you originally rented your space out. If rents have increased even $100 per year for each of the last three years, you’ve missed out on $7,200 worth of income. If your property was suited, that’s $14,400 in lost revenue because you didn’t increase your rents. 

Now this is assuming you raise them them maximum amount, but that’s to make a point. The point being, you’re leaving money on the table!

Guarantees and Rules

will tenants leave if rents increaseNow there is no guarantee this will work every time. You may have some tenants that simply cannot afford the increase.

Whether they are just getting by, whether your property wasn’t quite working for them, there will be times when people will move out on you leaving you with a vacancy. This isn’t a bad thing.

If that’s the case and you’ve done your homework, you now have a very solid idea of what the local rents are and if you have a great property, you will be getting an even larger increase than the potentially discounted rent you offered your tenants.

It can be sad to think about losing tenants and the extra work involved in having to prep the property for new tenants, going through the screening process, starting over with new people and the concerns about whether you picked the “right” tenants, but as I’ve also mentioned time and time again, landlording is a business. And you have to run it like a business.

Which brings us back to the rules your business has to work under. Make sure you understand all the applicable local rules for rent increases. There can be caps on increases, timelines for increases and many other variables you’re required to know when it comes to increases.

Some areas have rent controls in place limiting how much rent can be increased per year. Usually these are tied to inflation and they are typically far less than the market will bear. If your region is restricting your increases with rent control laws, you need to consider increasing rents the maximum allowable each year so you don’t get left behind.

Often you cannot retroactively increase, so if you don’t do it now, you lose it forever, so don’t miss out. Other areas have specific legislation about timelines for notifications to tenants about increases and how often rent can be increased.

My location requires 90 days notice of a rent increase (which must include three full months) and I’m only allowed to increase once every 365 days, or once per year. Your local landlord tenant laws may be similar or may be more restrictive, so make sure you look into that as well before you attempt to increase your rents.

An illegal increase may not necessarily result in fines ( in most cases they are simply void), but if you’re not sure find out. Usually it just results in resetting the clock and delaying when the rent actually increases.

Finally, some areas also have caps on how much rent can be increased in a year. This too can cause issues if you miss out as you cannot stack multiple years if you missed out. So again, become familiar with the local legislation.

If you’re going to be a successful, educated landlord, you really do have to run it like a business and this means rents changing to reflect the market. These days those changes are typically going to be upwards, so you need to stay on top of your market!

Hope you enjoyed this article, if you have any hints or tips you can share with the other landlords that visit us, be sure to leave a comment below and thanks for reading this far!

Bitterly Cold and Depositing Rent Without Going Outside

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Depositing Rent Checks

WU-EnglockupSorry for my absence, but it’s hard getting back into writing articles when you’ve been out of it for a while. Fortunately as I was sitting here making money on my rental properties, I came to a realization.

Depositing rent from my desk sure beats wandering out to the bank in freezing cold.

I’m not sure where you’re located as I know many of you are from warmer locales like Florida and California, but where I’m at it’s freaking cold. Yet I’ve deposited almost $2,000 today without stepping outside and it’s not even 10am here yet. And rent day isn’t officially until tomorrow!!

So what’s the secret? It’s called Interac e-transfers and if you can get your tenants to start doing this it can be a huge time saver for you. Sure there’s nothing like having cold hard cash in your hands, or a stack of post dated checks, but when it’s minus oh my freaking god outside, not having to either meet the tenant in person and not having to go to the bank suddenly become a welcome relief.

Now before you go making this mandatory for all your tenants, there are a couple caveats. Not all banks offer this service and both parties need to be set up to do online banking.

Your first step is to ensure your bank has this option before you go getting the tenants onto it.

It can be called Interac transfers, email money transfers or several other cute names, but here’s the basics of how it works if your bank supports it. With just your email address and a secret question/answer combination people can send you money. That’s how hard it is.

Yes there is some extra steps on the tenants end to set you up as a payee, but overall it is amazingly simple.

It’s far less painful than setting up automatic deposits via your bank account and it’s safe and secure. So if you haven’t looked into it and want an easy way to make deposits, check into it!

The Importance Of Having Current Tenant Contact Info

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Tenant Contact Info

keep good tenant recordsIf you’ve taken my Tenant Screening Course, you know I stress getting as much information as possible on your application and contacting all the references and contacts. It’s just your added benefit of making sure you get a really clear picture of who your potential tenant is and to make sure everything is consistent.

There is also some extra benefit from this as well.

If perhaps your landlord tenant relationship sours and you find yourself the victim of a midnight move, damages to the property you weren’t expecting and/or even just difficulties getting your rent, having knowledge of where the tenant works, contact information for relatives and friends and access to references can definitely work in your favor.

It’s always nice to try a have additional resources to contact when trying to track down a tenant who is avoiding you or owes you money, but it turns out there are other reasons as well.

Being a landlord can be a roller coaster, from the highs of getting your first rental property, your first tenant and even your first rent check to the darker side which at times it feels like it can shake your faith in people.

This week was another hill in my roller coaster. Every time I feel I’ve seen it all, I see something slightly different, both good and bad and this week had shades of both with multiple lessons learned.

When Tenants Impact Your Life

Over lunch with a landlord I’m mentoring this week we brought up a familiar subject, landlord tenant relations. As the saying goes with people in general, if you give them an inch, they’ll take a mile and this is especially true in a landlord tenant relationship.

The rules and boundaries you have in place need to be enforced so that you’re not taken advantage of. Whether it’s allowing a late rent payment, modifying your rules about pets or a myriad of other areas of leniency, you have to remember you have a business relationship, not a friendship with your tenants.

Having said this, when tenants have been part of your life for many years, it becomes more than just a tenant landlord relationship and when you lose one, it can be shocking.

And this week I lost a great tenant.

Kirk was a 70 year old fellow who had been with me in one of my shared accommodation properties since October 2008. Five straight years.

Through the tough years of the economic downturn and the good years of steady turn over, Kirk had been a rock in the house making sure it was clean, the other tenants were staying in line (or I quickly knew discreetly who the problem was) and acting as an ambassador to other incoming tenants.

He always made the new people feel right at home and was quick to welcome them from wherever they came. It was common in this house for Kirk to make a roast in the slow cooker or chili or some type of stew and to share it with everyone on Saturday and Sunday’s.

I mentally reviewed where some of the tenants  I had in this short term accommodation had come from and the list was extensive. People from not just across Canada and the US but also Australia, Ireland, Poland, Russia, New Zealand, Mexico many countries in the Middle East and many more that I’ve likely forgotten. And they all seemed to comment about how Kirk made them feel at home.

Perhaps especially the young twenty year old currently staying at the house who called me Tuesday night to tell me that Kirk had passed away at work that day.

Kirk had treated him like his own son and understandably this young man was extremely sad to lose this fellow so close to him and such a rock in his life. It’s just a testament to what a great tenant and a good person Kirk was. Sure he had his demons, but he affected so many people in a positive way.

There was a long list of previous tenants who would often be repeat clients as they cam back through our city for work and they always wanted to be back in that house as they enjoyed being around him. It was a common occurrence to show up at the house and find one of these former tenants just stopping by to say hi to Kirk or taking him out for dinner as he had made such an impact on them.

He will be sorely missed

Which brings me full circle back to having current tenant information and the lesson learned from this. As a landlord, we often have to do things which make us uncomfortable. Be it confronting tenants, evicting tenants or simply saying no to tenant requests.

Well Tuesday night I had to make the uncomfortable call to Kirk’s daughter to inform her of the news. I wasn’t sure if she knew already or if I was going to have to pass on the news. I dreaded making that call, but as a landlord, I have responsibilities especially when it comes to doing what’s right, as touch as it may be.

The dread became worse when I discovered I broke my own rules and didn’t have the full phone number for her. Here I teach people to get contact info and I couldn’t even get this right. I had a partial phone number, but obviously at the time Kirk didn’t have the complete number.

Fortunately her number was in his room and I made the call.

Also fortunately, I wasn’t the first to talk to her. Kirk’s work had called her earlier in the day. I had a quick conversation and we arranged to meet later in the week so she could collect his things.

The next day I began to reach out to some of the former tenants I knew had often come back to see Kirk and it wasn’t long before my phone was abuzz with text messages as word spread. Many knew each other and the resounding message was how much he will be missed.

So just to close up, there are some lessons to be learned.

Even though many tenants often portray us as cold hearted landlords, and it may come across that way at times, tenants do affect us. I had quite a sleepless night that night  and I know I will miss my tenant of so many years for more than just being a rock steady tenant. He was a good person.

Second, you need to stay on top of your tenant contact info. This is the second time I have had to deal with a death of a tenant and I also had to make a tough call that time as well. I’ve also had to call parents when tenants were badly injured and it’s never an easy thing to do, but imagine not being able to update loved ones about their sons or fathers.

So stay on top of your records and remember to treasure your good tenants, you never know how long they will be around.