With the national real estate market still sputtering, many owners are unfortunately unable to sell their property for what they own. Mortgages above market value create upside down owners who are stuck with homes they can’t afford to sell. The same is sadly true here in the Smoky Mountains of East Tennessee. Many of these owners are resorting to renting their Gatlinburg area real estate properties to be able to continue to make the payments. Because rents are still more than mortgages in most instances, this can work but inexperienced landlords are very much at risk as they try to learn the ropes. Here is my quick primer for first time landlords (based on many years of renting property and some very painful lessons learned early on):
- The best renter is not often the person who will pay the most in monthly rent. The best renter is the person who will treat your property with respect, pay on time, and generate a minimum of complaints.
- Remember that anyone can say that they are a great renter. Always get references from previous landlords and speak to them personally, even if they aren’t local. Anyone who doesn’t have a reference should be renting for the very first time and somehow be able to prove that fact.
- Although you can’t officially discriminate using age as a factor, older renters are generally more respectful of your property than young people. Also, older folks are usually less likely to move quickly.
- Someone who can’t come up with the first & last month’s rent as well as a security deposit (FLD) is a risk that can’t really be fully ascertained. Although we all want to help people (and I still often do), there is good reason for requiring the full FLD that has been reconfirmed by landlords everywhere.
- Man’s best friend is a dog but a dog that isn’t properly cared for is certainly no landlord’s friend. I have a soft spot for dogs and our rescue Jake is a remarkable animal that I wish could live forever. With this being said, a dog (or cat) that isn’t attended to is an unmitigated disaster for any homeowner!
- A quick background check is an affordable and sensible step in evaluating potential renters. So much better to be safe rather than sorry after the lease is signed.
- Make sure that a signed copy of the lease is given to the renters and that all security deposits are properly accounted for.
In the event that something does go wrong (despite all of the precautions above), there are some things you simply cannot do:
- Keep good records and make sure that renters are given a receipt for all rent payments.
- Don’t turn off utilities to “force” someone out. This is illegal and will not gain you any points with a judge should you have to go to court.
- Don’t take matters into your own hands by attempting to aggressively collect overdue rent. There are legal methods of eviction and collection but keep in mind that the laws still favor the renters and that is more true every day.
Remember, a bad renter is much worse than no renter so it pays to be picky. If you don’t want to be a landlord, see us to get your property sold!