As a real estate investor in Detroit, it’s important to keep the best tenants in your property. While there are plenty of laws that dictate how to navigate the tenant screening and selection process, it’s equally important that you keep good tenants for as long as possible. Some of your tenants are going to rent a home from you until they can buy a home of their own, and that’s OK. There will always be people out there looking for a good Detroit rental property. With that in mind, these tips can help you evaluate and keep your best tenants for the long haul.
Choosing the Right Tenants
The Fair Housing Act is a federal law that dictates the tenant screening and selection process. This law ensures that landlords don’t discriminate against potential renters based on race, sex, religion, and a number of other factors. As a landlord, you’re responsible for knowing these laws and abiding by them. Additionally, the state of Michigan has its own laws that govern Detroit real estate investors, and it’s important that you follow them at all times. Failure to do so leaves you subject to significant fines and severely damages your reputation.
How to Evaluate Renters for Your Detroit Investment Property
Once you’ve received written consent to perform a credit check on a potential tenant, you should make sure that you’re renting to someone who is financially responsible. However, this doesn’t mean that you have to write off anyone who has a blemish on their credit report. Remember, plenty of renters have hiccups in their credit history, some of which may be precluding them from buying a home. Just because someone has made some mistakes in the past doesn’t mean that they won’t be good renters now. However, you should have a minimum credit score requirement in place. If someone applies for your Detroit rental property but has a score that falls below your minimum, be willing to move on to another applicant.
Additionally, you probably only want to rent to someone who has verifiable employment. As a landlord, you must abide by the lease, but you do so with the understanding that the renter will pay you on time, every time. Call to verify that the place of employment listed on the rental application is accurate, as there are people who will lie on rental applications. If someone doesn’t have a job, it’s safe to assume they’ll struggle to pay you on time each month.
Finally, reach out to previous landlords and find out why the tenant is searching for a new place. Were they constantly late on their rent? Did they leave before the lease was up? Did they do damage to the property before they left? Remember, you’re looking for quality renters, and someone’s past behavior is the best predictor of their future behavior. If your applicant was always two to three months behind on their rent and damaged their previous rental home, that’s probably not someone you want living in a home that you own. Once you’ve chosen the right renters, how do you keep them?
How to Keep Good Renters in Your Detroit Rental Properties
Finding good renters is great, but if they leave after their first lease term is up, you’ll find yourself right back in the same search. As we discussed earlier, some renters will move on when they find a chance to buy a home. Others will move on when they relocate for work, family, or another issue. However, you can keep good renters in your property for an extended period of time.
Communication is key in the world of real estate investing. While you don’t have to be “on call” every second of every day, it’s important that your tenants know that they can get in contact with you when they need something. Even if you don’t answer the phone every time a renter calls, call them back as quickly as possible. When your renters know that you’re easy to contact and will address their concerns, they’ll be more likely to stay in your property.
Communicating effectively with your renters is only part of the equation. You also need to respond quickly to their needs, as long as it’s reasonable to do so. For instance, if your renter calls you at 2 AM to tell you that the dryer isn’t working, it’s reasonable to tell them that you’ll have someone come out and look at it the next day. However, if someone calls you at 11 PM and says that they have a pipe spewing water across the kitchen, it’s your responsibility to contact a plumber who offers emergency services to get the problem solved quickly. In addition to repairs, don’t get behind on maintenance tasks. Remember, you own the home, but your tenants live there. They want their home to look nice and feel inviting. Handling seemingly minor maintenance tasks in a timely fashion ensures that they’ll be comfortable and confident in the home and you as their landlord.
The first lease agreement that you enter into with your tenants covers how the home looks and functions when they move in. However, when the lease comes up for renewal, you may want to increase their monthly rent. Consider offering them some bonuses for signing a new lease and agreeing to stay in your Detroit rental property. For instance, offer to have a dishwasher, new lighting, or new tile floors in the space if they’re willing to pay more in rent each month. Additionally, if you have a good relationship with your renter, consider offering them a discount on monthly rent for signing a longer lease.
Finally, commit to being consistent. Renters want to know that the way you treat them today is how you’ll treat them next month. Be consistent in your response to their issues, your communication with them, and in how you collect the rent. Communication is crucial, but consistency is key.
Building Yourself for Future Success
Finding the right renters is important, but keeping them is paramount. Our team not only knows the Detroit real estate market, but we also know how to help you evaluate renters and are here to help every step of the way. Contact Upside Investments today to find out more about how we can help you take your real estate investing to the next level.
