So you just hung up the phone and the wonderful tenants you've had for a few years told you they're moving. Now the heartburn sets in; it's time to find new tenants. You've done this before, but you can't seem to escape that nagging worry or sense of uncertainty.
Before considering the nitty-gritty best practices for finding a tenant, let's take a big step back and make sure you have the right philosophical mindset. Having the right mental perspective will save you from many of the mistakes landlords make and help you move forward with confidence and poise.
The 3 keys for a healthy mindset when filling your vacancy
1) If you have a mental image of the "ideal tenant"…you've got to let it go.
Some property owners come to us with a mental image of who the "ideal tenant" would be for their home. In most cases, these images of the "ideal" are against the law.
When housing is placed on the open market and decisions are made about who will or will not be selected as a tenant, the process is regulated by very strict fair-housing laws. These laws are intended to ensure a fair market place and violations can result in significant penalties.
In reality, the ideal tenant is one who: 1) Moves in shortly after the property becomes vacant so there is no extended vacancy loss. 2) Pays their rent in full and on time. 3) Treats your home with care and respect and does no damage to the property; 4) Causes no issues for concern with the neighbors. None of these four critical factors has anything to do with race, religious beliefs, disability, marital status or any other conditions that fall under fair housing laws.
2) That's the home I grew up in, don't change or damage anything!
When a home that has special meaning to you becomes a rental, it can be tough emotionally. Remember two key points: You are competing against other rentals. Also, you can't allow yourself to be anxious about the inevitable wear and tear and even damage that happens in a rental (note that tenants pay to fix damage, but not normal wear and tear?this distinction can get tricky). No matter how careful you are about screening tenants with stellar references, fixtures will be damaged, plants will be trampled and garage doors will be backed into. It happens with the best of people, with the best of intentions.
3) Setting the rent?what you hope it will be vs. what the market dictates
Two very important factors to keep in mind when establishing the rent:
Your mortgage payment and other expenses have no bearing on the rental value. In other words, what you hope or need the rent to be, may not be the rent dictated by the market, that is, what comparable properties are renting for at that point in time. Rents are a moving target and fluctuate based on market forces. If you ignore comparables and focus on what you need the rent to be, your vacancy could extend much longer than it should.
Vacancy time is money lost that can never be recovered. If you're pushing for a price that is too high, and allow your home to sit for longer than it should, most of the additional money you were hoping to make over the course of the year's lease is gone.
There is much that can be written about the nuts and bolts of successfully navigating the search for a tenant, but these three points will give you a perspective that will lead to a more successful and less painful process for finding you next tenant.
*By no means is this intended to provide a thorough scope of all that is protected under fair-housing laws.
Schmidt can be reached at [email protected]
Before considering the nitty-gritty best practices for finding a tenant, let's take a big step back and make sure you have the right philosophical mindset. Having the right mental perspective will save you from many of the mistakes landlords make and help you move forward with confidence and poise.
The 3 keys for a healthy mindset when filling your vacancy
1) If you have a mental image of the "ideal tenant"…you've got to let it go.
Some property owners come to us with a mental image of who the "ideal tenant" would be for their home. In most cases, these images of the "ideal" are against the law.
When housing is placed on the open market and decisions are made about who will or will not be selected as a tenant, the process is regulated by very strict fair-housing laws. These laws are intended to ensure a fair market place and violations can result in significant penalties.
In reality, the ideal tenant is one who: 1) Moves in shortly after the property becomes vacant so there is no extended vacancy loss. 2) Pays their rent in full and on time. 3) Treats your home with care and respect and does no damage to the property; 4) Causes no issues for concern with the neighbors. None of these four critical factors has anything to do with race, religious beliefs, disability, marital status or any other conditions that fall under fair housing laws.
2) That's the home I grew up in, don't change or damage anything!
When a home that has special meaning to you becomes a rental, it can be tough emotionally. Remember two key points: You are competing against other rentals. Also, you can't allow yourself to be anxious about the inevitable wear and tear and even damage that happens in a rental (note that tenants pay to fix damage, but not normal wear and tear?this distinction can get tricky). No matter how careful you are about screening tenants with stellar references, fixtures will be damaged, plants will be trampled and garage doors will be backed into. It happens with the best of people, with the best of intentions.
3) Setting the rent?what you hope it will be vs. what the market dictates
Two very important factors to keep in mind when establishing the rent:
Your mortgage payment and other expenses have no bearing on the rental value. In other words, what you hope or need the rent to be, may not be the rent dictated by the market, that is, what comparable properties are renting for at that point in time. Rents are a moving target and fluctuate based on market forces. If you ignore comparables and focus on what you need the rent to be, your vacancy could extend much longer than it should.
Vacancy time is money lost that can never be recovered. If you're pushing for a price that is too high, and allow your home to sit for longer than it should, most of the additional money you were hoping to make over the course of the year's lease is gone.
There is much that can be written about the nuts and bolts of successfully navigating the search for a tenant, but these three points will give you a perspective that will lead to a more successful and less painful process for finding you next tenant.
*By no means is this intended to provide a thorough scope of all that is protected under fair-housing laws.
Schmidt can be reached at [email protected]