A tenant has left and your rental unit has gone dark, or worse yet multiple rental units have gone dark. Not only does this mean no rent for that time, but then there’re the costs of getting a new tenant – making the unit “rent ready”, advertising and broker’s fees, your time – the costs can be significant. Suddenly, what looked like a good year, financially, is now mediocre or worse. How to prevent this? Service and Selection.
Service. Make your place irresistible and irreplaceable to tenants. That means to take good care of the building, don’t be a slumlord. Also, make sure you go out of your way to treat your tenants like the gold that they are. How does being nice and taking care of your place help? It makes a tenant think twice about leaving because they would rather avoid the uncertainty of going someplace new for the familiar pleasant environment you’ve created. It won’t work forever, but if it gets you an additional few months or a few years of uninterrupted cash flow, it’s worth it. This is something you can do, right now, and it can be a win-win for you and your tenant. Think of an improvement you can make to one of your properties – something that will enhance it’s value to you, and something that your tenant will appreciate. Then make it happen.
Selection. Many landlords are so eager to get a paying tenant in place that they will take the first person that has the ability to sign a lease and write a check for the rent. Yes, this will stop the “bleeding”, but what next? Will this new tenant leave shortly thereafter leaving you with the same problems you were trying to avoid? Can they afford the rent long-term? Do they have a couple of teenage boys that can’t wait to throw a huge party at your house the minute mom and dad go away? Selection means biding your time, and carefully sizing up your tenant, both financially, personally and from a “gut” level. We do this all the time for our clients because we’ve seen just about every which way these things can go bad. Through a solid tenant screening process, we’re able to help our clients “spot the issues” in a potential tenant file before they become a problem.
Avoiding cash flow disruptions is just one part of our Rental Business Strategy Review we do with our landlord clients. Want to hear more about other strategies our clients are using to keep their cash flow flowing? Give us a call, and we’d be happy to evaluate your rental business strategy to see if there are ways to improve upon it and help you come up with a plan to make it happen. You can reach us at 631.669.6300 and ask to be put on my calendar for a brief ten-minute introductory call to see if this structure might be right for you, or feel free to shoot me an email at JClark@bfclaws.com.
Jim Clark
