7 rules to keep your tenant onside
As part of our New Year’s resolutions articles, one of the areas we discussed was how to cement the landlord/tenant relationship. One of the most important principles we highlighted was the need to be firm but fair in your tenant relationship. In this article, you’ll learn a little more about the strategies you can use to be firm but fair that will help to improve your tenant relationship.
Buy-to-let investment is a game with rules
Investing in buy-to-let property and becoming a landlord is a game, and, like all other games, the winners are those who play by the rules. If you don’t stick to the landlord laws, you run the risk of being fined or even banned from letting your property.
Your tenants must play by the rules, too. For example, if they don’t pay their rent or they damage your property, they run the risk of you starting eviction proceedings. If you do need to get rid of a tenant (fortunately a very rare occurrence), you’ll need to follow the rules for buy-to-let landlords to evict nightmare tenants.
The landlord laws dictate what you can and cannot expect your tenants to do and how they should act. As a buy-to-let landlord, however, you have a reasonable amount of scope within these laws to create your own tenant rules and policies. You set these out in a fair tenancy agreement.
Why you must be firm but fair with your tenant
One of the most basic human needs is the need to be liked. Certainly, if your tenants like you then your relationship is likely to be much better. And good tenant relationships make everything much easier. However, in your desire to be liked by your tenants, it is easy to bend your own rules. A word of warning: if you do this, you will have stepped onto a slope that’s more slippery than a banana skin on an ice rink. The saying ‘If you give an inch they’ll take a mile’ most definitely applies in the business of buy-to-let and the landlord/tenant relationship.
Why you cannot afford to be too nice
You can be too nice to tenants. If they are late paying their rent, you allow them another week. Next month, they’ll be two weeks late. Then three. Before you know it, they will be a month or two in arrears – and you’ll be funding your buy-to-let mortgage from your own pocket.
You cannot afford to have double standards, either. If you bend the rules for one tenant, you’ll find that other tenants will expect the same treatment; and if you don’t, you may be accused of discrimination. You may be taken to court. The chances are you will lose.
Now, I’m not saying that you need to be a mean, nasty landlord. Far from it. What you must do is stick to the rules that you have agreed with your tenant before they signed the tenancy agreement. And guess what – your tenants expect you to enforce these rules.
It’s not your problem that a tenant’s paycheque is late arriving, and your tenant knows this. You may choose to make an exception to your rules in such a case, but you should press home the fact that it is an exception – and put it in writing so there is no repeat next rental payment date.
Rules to be a firm but fair landlord
There are a few ground rules to be firm yet remain on the side of being nice and not nasty. If you follow these seven rules, you won’t go far wrong:
1. Write a solid tenancy agreement
Ensure that the policies laid out determine how you and your tenant should act. Explain every clause to the tenant and make sure that they understand.
2. Don’t break the terms of the tenancy agreement
Stick to the tenancy agreement, and enforce the rules and policies laid out in it. Don’t make exceptions, unless it is absolutely necessary.
3. Ensure exceptions you make are highlighted
If you do decide to bend the rules under exceptional circumstances, make certain that your tenant knows it is an exception: things will return to normal business immediately.
4. Stick to the rules yourself
If you don’t play by the rules, you cannot expect your tenant to play by the rules. Make sure that you do what the tenancy agreement says you will, otherwise you simply give the tenant ammunition to not keep their side of the bargain.
5. Be consistent with all tenants
There cannot be one rule for one tenant and another for others. Consistency is key, and if your rules are the same for all your tenants, then you will never have to think about the way in which you treat one tenant differently to another. Consistency makes your job easier.
6. Be good at explaining difficulties and reasons
The government and the Labour opposition have managed to paint a picture of all buy-to-let landlords as wealthy layabouts getting richer from grossly overpriced rental properties. The best way to dispel this myth is, to be honest with your tenant. For example, if they are late paying their rent, tell them of the problems that cause you. There is a mortgage to pay, and if you default on this, not only do you lose your business, but the tenant loses their home.
Be sympathetic, but know that rules are rules and tenants do expect you to enforce them.
7. Put it in writing
If you put everything in writing, there can be no room for dispute. This starts with the tenancy agreement but continues with all communication. Even if you have a verbal conversation with a tenant, summarise what has been said and agreed in an email. You can thank me for this advice later!
You don’t have to break rules to be a nice landlord. By being firm but fair, you ensure your buy-to-let business is sustainable by building a strong landlord/tenant relationship. Never be a pushover, and if you do make an exception to the rules, make sure that it is understood to be an exception – a one-off event that won’t be repeated.
You can’t afford to be emotional as a buy-to-let landlord. You are running a business. If it loses money because you haven’t stuck to your own rules, your tenant can always move on – you probably won’t have that luxury.
One of the reasons buy-to-let investors use Ezytrac is because it detaches them from the emotional side of the investment game. We are one of the fastest-growing investment property managers in the UK, and a big part of our success is the firm but fair way in which we treat tenants on behalf of their landlords. For more information about our effortless property management service, contact Ezytrac today at +44 0 1522 503 717.
Live with passion,