In your career as a landlord, negotiating with your future tenants is a must. You can also have a situation when your current tenant will negotiate during lease renewal. Negotiations may not always run smoothly, and, if you don’t hold your ground, you can end up with an agreement you’re not very happy with. This process can sometimes be tricky if you are not paying attention to what you are saying.
In this article, we’re gonna go over 5 mistakes you can make while negotiating with a tenant and we’ll give you tips on how to avoid them.
Assuming everyone is totally honest
Lying is easy, particularly for those who have to hide a lot. In actual fact, it’s not that anyone is dishonest but more that everyone is trying to impress and make you think they are the flawless tenant you have been searching for.
When it comes to trusting someone, you can never be too careful, as everybody wants to put their best assets in the spotlight. A way to avoid being too trustful and even naive is don’t shy away from background checks and ask for references since those are more professional sources you can base your decision on.
Not stating the lease terms clearly
The rental contract is a legal document that includes important information regarding what the accommodation includes, your responsibilities and rights, and potential penalties for late payments, early leave, or destruction of property. A key factor in having a good negotiation process with your tenant is making them understand the lease terms which they are signing. However, the often-complex terminology and legal jargon used in lease agreements can be overwhelming.
Some tenants, such as students, will likely require a guarantor who’ll be legally responsible for payments and penalties on behalf of the tenant. Some other optional clauses could include rules for having a pet, smoking, or running a freelancing business from your residence.
As a solution to make sure the tenant fully understands the contract, you can ask your property manager to help them navigate it, as they have vast expertise when it comes to legal contracts and can be of great help.
Faulty reference checks
One of the biggest mistakes you can make is not thoroughly screening tenants. Without thorough and effective vetting procedures, you’re far more likely to run into issues further down the line, ranging from undeclared pets and payment issues to property damage and even clandestine drug labs. The most credible-looking tenant and a charming person who may have an appalling rental history and a string of unpaid debts and may be ready to exploit the kindest of landlords. The only way to have peace of mind as far as possible is to ensure proper checks are completed.
The best thing you can do is ask for references from former landlords or property managers. If the candidate is hesitant to hand them over, it should be something to look out for, but if they do offer some up, take the time to speak to the references directly and ask probing questions regarding the tenant’s character.
Not setting clear expectations for tenants
This can lead to a number of issues as tenants will be unsure of what is expected of them, both in terms of their responsibilities while they’re living in the property and also any potential behavior issues. Without clear expectations in place, tenants may not be aware of what they’re not allowed to do on the property or how they should be interacting with neighbors or visitors. Tenants will also not be aware of any expectations regarding rent payments or maintenance issues that need to be addressed. A landlord must be clear and straightforward in setting expectations for their tenant prior to the rental agreement being signed.
This will prevent disputes and maintain good tenant relations. Make sure each tenant is aware of your expectations and rules before they move in, such as noise levels, pet policies, and utility payment options.
Not negotiating legal insurance
This can be a very expensive mistake, especially when the economy and job market are so unsettled. For a very small sum in comparison to the risk of losing rental income, rent can be protected and income received in the case of a potential eviction process that has to be carried out. Some policies will also cover legal expenses.
Are you making any of these mistakes? Every landlord has been there at some point! Learning the art of negotiation is the beginning of a profitable and worry-free lease.
A property manager is a skilled professional who can help negotiate in your favor. They’re up to date with the best tactics, know every trick in the books, and will make sure to keep you safe financially and legally.
Get in touch with us today and learn more about our services.