You may think it’s only the tenant who has a hard time paying the mortgage, but as a real estate investor or landlord, there may be times when it’s hard to pay the mortgage on your end as well. Here are some things you can do to avoid facing difficulty in paying your mortgage each month.
Keep your properties rented with good tenants. Simple as it may sound, this is the most obvious method for ensuring you’ve got rent money coming in each month to cover your property mortgage payments. Think about the math. If you miss two months’ of tenants, you have two months of out of pocket mortgage to pay. It takes a long time to make that up, and you may not have the luxury of waiting around for the “perfect tenant.”
Don’t allow yourself to get slack on advertising for new tenants. And don’t put off screening applicants or filling your properties because you get busy or overworked. Recognize filling your vacancies as a major aspect of your REI (real estate investment) business success and deal with it quickly and efficiently every time.
Yes, you do your best to find quality tenants. While you want to keep your properties full, finding good quality tenants is key. This helps avoid the turnover, or even worse – eviction rate. By “good” it means they pay their rent on time, keep the property maintained and don’t abuse the lease. Using background and credit checks, you can find the best tenants available and thereby do what’s possible to keep your rental fees coming in regularly. After all, you did this to make money, not lose money.
Look for longterm tenants. Don’t assume that quality tenants will necessarily be longterm ones. Some good renters may know they can’t stay over a few months at most. They may be students or working a temporary job. They may just be living in an area waiting to move or retire somewhere else. Whatever the situation, opt for longterm renters when the choice is available. Doing so will make filling a vacancy at least a more infrequent possibility. Your ad should be clear, too. If you have a policy of a minimum number of months, state that up front.
Keep the property well maintained. If you want good tenants, longterm tenants, and tenants who pay their rent on time, do your part to keep them. Deal with maintenance issues quickly. Make repairs as necessary. Upgrade appliances or at least ensure the ones you provide are in good working order. Respond to your tenants’ calls quickly, or if you can’t be sure they know you’ll be unavailable for a while. Get a landscape company. It’s worth $300 or so per month to attract tenants that a well-maintained property is important to them.
Being a good landlord will go a long in way in developing lasting relationships with your tenants, which will, in turn, help you keep them in your property longer. Often a tenant and landlord relationship can turn an average tenant into a great one simply because they want to keep that relationship intact.
In a tough economy, it’s important to do all you can to avoid facing the difficulty of paying the mortgage. That applies just as much to an REI professional as it does to the average renter. These simple tips can help as you work to develop lasting, longterm, rent-paying tenants to keep your properties bringing in the income you need every month.