Tips To Help You Avoid Getting Behind On Your Rental Mortgage Payments
At times it can be really frustrating when your tenants do not pay their rent on time. This leads to the landlord having to basically “front” the money for the tenant until they can pay the rent. The mortgage company is going to want their money and it is your credit on the line or worst yet you’ll be looking at facing a foreclosure action by the mortgage company.
In this article were going to go over some tips that can help you avoid getting behind on your mortgage payments in your rental properties.
It all comes down to the proper screening for good tenants and incentivizing them to pay on time and stay in your rentals as long as possible. Tenant turnover is a killer to your cash flow and is the key to be able to make your mortgage payments on time and be profitable with your investment properties.
Another issue we see with bad tenants is that they end up destroying your newly renovated property within the first year if not properly screened.
We buy rental properties in “as is” condition from many landlords who just don’t have it in them to go in after a tenant has destroyed the property.
One of the main question we get is “Can I sell my rental property with the tenants in it.” Yes you can. There are professional home buying companies like Blonde Girl Homebuyers who will buy your property with the tenant in place, even if you are in the process of eviction.
I know this may sound like common sense but one of the best ways to accomplish this is to keep your rental properties occupied with happy tenants. When you have happy tenants you have a better chance of them paying their rent on time and in full each month.
Incentivize Your Tenants
Give them incentives to pay on time or early. This only makes sense; you penalize them when their late so why not reward them when they’re on time. We like to send our tenants a gift card to a nice restaurant typically when they pay on time for 4 consecutive months.
“Whether you manage one property or a portfolio of several units, establish a work schedule and try to stick to it. While you can’t predict problems — and need to be comfortable with the possibility of handling tenant issues at any time of day or night”
When they pay on time all year it adds up about $120-$150 for the year. This makes sense for us because it cuts down on the time needed to pursue the tenant to get paid and in a way it give them an incentive to pay on time.
Fill Your Vacancies ASAP
If you know you will have a vacancy coming up arrange with the existing tenant to start showing that property before they leave. This will allow you to fill the vacancy immediately with very little time in between tenants.
Always be on the lookout for potential good tenants, continue to advertise even if you don’t have any rentals available. Build a list of potential renters that you can go to first when you know of a vacancy that is coming up. By “good” it means that according to their past landlords they pay their rent on time, maintain the property and don’t abuse the terms of the lease.
Make sure to take the time and spend the money needed to perform the proper background and credit checks . It’s like the old saying goes “Pay now or pay later either way you’re going to pay“. We have found that it’s a lot cheaper to pay upfront. Do not skip this step in your search for a new tenant. It will save you an enormous amount of stress and money.
Extend Your Lease Terms
When setting your lease terms always go for the longest time frame possible. Shoot for 18 -24 month leases and offer an incentive of no rent raises if they go with the longer lease terms.
One other thing to keep in mind is that we find it is much easier to fill vacancies in the spring/summer months then in the fall/winter months. It could be families want to settle in before school starts or they just don’t like moving in the winter months. So when setting up your leases look to end them in the spring months even if this means a 13 or 14 month lease. We find this really works well in the Northern areas of the country due to the harsh winters they experience.
Maintain Your Rental Properties
Keeping your rentals well maintained and all items in good working order is another thing we find really helps keeping rentals occupied. Many landlords over look this item, especially if they’ve become tired landlords.
Every year we have tenants that have moved out into other rentals only to return and say that the service and attention that we provide is well above many other landlords. when you tenants call in a repair or complaint don’t just put it off or avoid it; fix it or address it immediately. This really goes a long way in getting your rent on time every month. you are not just providing a roof over their head you are providing the convenience to the tenant of not having to do repairs that they can’t afford or don’t know how to complete.
In the end it comes down to being a good landlord in order to attract and keep good tenants. Doing your part of the equation will make it much easier to keep tenants long term in your rental properties which will assure that you do not fall behind on your mortgage payments and maintain positive cash flow.
If you have become a tired landlord and are ready to rid yourself of the hassles of owning investment real estate give Gracie at Blonde Girl Home Buyers a call at the Jacksonville Fl office. We’ll buy any type of house regardless of the condition or situation you are facing.
Blonde Girl Homebuyers
3948 3rd St S # 134
Jacksonville Beach FL 32250-5847
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