April 2008
Community Paper
copyright ©2008 by Community Paper College Park, Inc. All rights reserved.


How (Not???) To Manage A Rental Property - Part 4 of 4
by Mike Derenthal, Derenthal Realty Group and College Park resident


So you’ve placed your home up for rent, established a competitive rent rate, located an outstanding tenant(s), signed a lease and your new tenants have moved in to what may be the one of the single biggest assets you possess? No sweat, right?

Most landlord / tenant relationships start out quite nicely. The rent shows up on time, the lawn stays mowed, and the tenant and landlord are respectful of the obligations each has to the other. In many cases, this type of blissful relationship can go on for years at a time without any issues. Other times however, things can get rocky. My experience is that if things are going to get rocky, you will see signs of it very early in the tenancy.

It is in people’s nature to test boundaries. We all do it, starting back when we were about a year old. I’ve got one at home right now, and if I’m not careful, I’m going to have one of the cutest, bossiest two year olds in College Park. Her mom and I have to constantly work to encourage her to follow the rules in a way that is reasonable. Consistency and communication are key, as is the follow through on any expected consequences.

Now if you think I’m going to go on record, here in College Park’s own Community Paper, and compare grown adults to two year olds (some of whom could be potential clients some day)….. you’re right. Sorry. It is what it is. As with most things in life, things don’t really change as we get older, we just try to make them more complicated than they need to be. This applies to landlording too.

Most landlords find it easy enough to expect a tenant to pay the rent on time each month. But many a landlord are guilty of not enforcing the terms of the lease when rent is late. This ultimately sends the signal to the tenants that the lease contract is not to be taken all that seriously. This is where most tenant/landlord relationships begin to sour.

Even the best of tenants will sometimes test the boundaries of the lease, and typically within the first three months after moving in. The most common issue is a rent check that shows up a day or two late. I can tell you from experience that, gone unchecked, a day or two late turns into three or four, and then a week. Now let’s keep in mind that a mortgage payment is typically due on the 15th of each month. If you don’t have that rent check until the 7th, and then won’t actually know if the check is going to clear for several days after that, you can start to see that even a lag of a few days means that you as the landlord are taking considerable risk that you may be financing someone else’s housing expenses. Worse yet, if you find yourself in a situation where you have to evict a tenant, any delay in posting the eviction notice will ultimately translate into more money lost because the eviction process can’t begin until after the tenant is given a written notice.

There is nothing that gets someone’s attention like an eviction notice. We have a policy that all rents are due on the 1st. There is no grace period. And if a rent is not received by the 1st, a three day notice of intent to evict is posted on the front door of the property on the 2nd. Unreasonable? I don’t think so, especially if I tell the tenant what to expect up front, before they sign the lease. I often have tenants ask if a grace period can be incorporated into the lease. I think that is totally reasonable, so what I have done in the past is ask the tenant how much of a grace period they would like, and back their rent due date up by that many days. So if someone would like a five day grace period, I structure their lease so that each month’s rent is due on the 25th of the preceding month, with a five day “grace period”. That way I can still make one trip to the PO box on the 1st of the month, and on the 2nd I can plan on either depositing rent checks or posting an eviction notice as needed. The important thing is that I act consistently and predictably.

In seven years of being a landlord, I have never had to evict a tenant (that sound you just heard is me knocking on wood). But almost all of my tenants have received an eviction notice at one time or another. In most cases it happens just once. And as mentioned, it is typically early in the tenancy. It is usually followed later that day with a phone call…
Tenant: “I just came home and found a big red eviction notice posted on the front door! Why are you evicting me?!?!”

Me: “I’m not evicting you yet. I’m just serving notice that I have the right to begin the eviction process within three days because we did not receive your rent for this month per the terms of the lease. When can you stop by today to drop off the late rent?”

In most cases, this exchange is followed by an explanation of why the rent was late, and I make arrangements for the rent to be delivered in person either that day or the following day. I know this sounds extreme, but it works. And in almost all cases, it only happens once.

Now if you are currently, or ever were, a tenant (most of us have had, or will have, the pleasure of paying rent at some point in our life), this article might seem somewhat one-sided. To be certain, there are PLENTY of landlord/tenant problems out there that are caused by landlords. Landlords should keep in mind that a rental agreement is a contract, and as in any contract, both parties have an obligation to the other. Managing tenants is not a one-way street. If I am going to reasonably expect a tenant to perform, so must I. When a situation arises that affects the tenant’s living conditions, I need to get it addressed immediately. Mutual respect for each other goes a long way toward helping resolve issues when they do come up.

That said, rules is rules, and I have an obligation to all of our tenants, owners, and myself to make sure that everyone is treated fairly and consistently. At the end of the day, sticking to these rules makes life easier on everyone.

* This is the last of our series on landlording. Feel free to drop me an email at mike@derenthalrealty.com with any additional landlording questions.

Feel free to drop me an email at mike@derenthalrealty.com.

by: Mike Derenthal, Derenthal Realty, www.DerenthalRealty.com
1520 Edgewater Drive, Suite E, Orlando, FL 32804
407-965-1919

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