Three months.

The worst tenants in my 30-plus years as a residential landlord lasted only three months before they stopped paying rent. After going to court to evict them, I walked into the apartment and found large stains on the carpet that I could only hope were some sort of beverage. I’m skeptical. I think it was even grosser. You know what I mean.

Although the judge awarded me a money judgment, I never collected a dime and was out both the unpaid rent and the repair costs.

But I don’t blame the tenants. People will be people. I blame myself.

I was in a hurry to rent the apartment and busy with three kids and my real estate paralegal business, so I didn’t take the proper time to vet them. 

You reap what you sow. Every time.

That experience has shaped how I do business as a landlord. Perhaps my lessons will help you.

Advertise with a Yard Sign 

I learned early to avoid newspaper or online ads. A few people will show up to the apartment and lose interest when they see it. Maybe it’s the neighborhood, maybe it’s the barking labradoodle next door, I don’t know, but ads can be a waste of time.

A sign in the front yard has been my best form of advertising for a few reasons:

• Prospects are at least interested based on what they’ve seen from the outside.
• Neighbors want good neighbors and are motivated to find tenants for you. 
• Signs are inexpensive and re-usable.

Of course, you’ll need a phone number on the sign. If you aren’t comfortable giving random strangers your phone number, buy a cheap pay-as-you-go phone. Keep it powered down when not in use and only give tenants your everyday number.

Once your burner phone is lighting up with texts from prospective tenants, you must vet them like they’re trying to date your daughter.

Screen Applicants Like They’re Trying to Date Your Daughter

(It’s the most important part of the process)

You must approach the early stages with the highest standards, firmness and real due diligence. Unfortunately, you can’t assume that everyone wants to pay on time, take care of your property, and send you Edible Arrangements on your birthday.

Some people will take advantage of you if you’re Mr. Nice Guy. The landlord business isn’t for you if you have a strong, dysfunctional desire to be liked. Start firm, but fair, and loosen the reins as they earn it. 

One of my current tenants has rented from me for over ten years. I started out strict and firm with her, but over time we developed a more relaxed relationship. She’s a great tenant, and evidently thinks I’m pretty good too because her friends always ask her if I have more rental units available.  

Once I post a property, the screening starts before I ever meet anyone in person. 

Let all calls to your new burner phone go to voicemail. It immediately helps screen applicants because the people unwilling to leave a voicemail eliminate themselves. You can then listen through the messages and return calls from applicants who sound organized, serious, and reasonably pleasant.

When you return these calls, get as much information as possible. You can rule out many people without leaving your house. Find out why they are looking for a place. How many people will be living in the house? If renting now, are they leaving on good terms? Pets? Smokers? (No smokers allowed). 

Here are a few other tips:

• Group appointments in 10-15 minute blocks. Prospective tenants will see that other people are interested, creating a sense of scarcity that helps your cause. 

• Meet all parties to the lease. They will make the time if it’s important to them. You want to feel comfortable with everyone involved. 

• Check county records for civil actions, judgments for money owed, evictions and foreclosures. Avoid people with multiple evictions because they are hoping you will be their next sucker. 

But use your best judgment. 

I rented to a young lady once who lost her house in foreclosure, but I listened to her story and chose to rent to her. She had no other judgments or legal issues, and turned out to be a great tenant. Sometimes good people go through hard times beyond their control and need a helping hand. 

Put Everything In the Lease – Don’t Assume Common Sense

Once you select a tenant, require the first month’s rent and a security deposit equal to one month’s rent. Don’t negotiate on that. Cash or money order only. In my experience, if someone cannot come up with the money to move in, bigger problems are usually coming later. 

Your lease agreement should clearly spell out what is and isn’t allowed. Don’t assume people share your definition of “common sense.” If it matters, put it in writing. 

• No unauthorized occupants. 
• No pets without permission. 
• No smoking. 
• No alterations to the property without approval.

And by all means, no rave parties or other loud disturbances that create problems with Mrs. Hargett, the elderly widow neighbor. 

You really have to expect the worst and mitigate your risks in your lease terms.  

Also, make sure your tenants are comfortable reporting repairs, regardless how small they may seem. A tiny leak under a sink can quietly turn into rotten flooring and mold if ignored. This happened to one of my apartment’s toilets and I had to replace the bathroom subfloor. The tenants are lucky they didn’t fall through the floor while taking a shower.

Speaking of repairs, you should ask yourself this litmus test question to determine if you’re built to be a landlord. 

And if you think people won’t surprise you, they will. 

A friend of mine rented to a family once and walked in unannounced while they were slaughtering a goat in the kitchen. I wish I were joking (so does he). Experiences like that teach landlords to stop assuming, and start specifying. 

So, no animal killing and butchering allowed on the premises. Write it in the lease. Write everything in the lease.

Make Rent Collection Work for You

You’re not yet a multi-unit full-time slumlord who has the time and money to chase down bad checks. You’re probably juggling an 8-5 job, twice-a-week hot yoga classes, and your kid’s T-ball practice. 

Require tenants to pay rent by cash, money order, or digital peer-to-peer payment apps such as Cash App, Zelle, or PayPal. Forget the headache of personal checks.

And you absolutely must be consistent about late rent. Have your speech prepared. 

I learned early to make my expectations clear. The lease sets a due date each month—the 5th, for example. If rent isn’t received by the end of that day, it’s late. I allow a five-day grace period, and the late fee kicks in on the 11th. 

Because I understand that life happens (you can’t plan for new brakes on your car), I’ll wait until the tenant is 10 days late to start the eviction process. But say it loud enough for the folks in the back to hear, the eviction process starts on day 11. 

Be Firm First, Flexible Later

Clearly spell out all of these requirements and consequences in the lease, and strictly enforce them in the first few months. If you give an inch, some people will take enough to hang you. However, as the tenant earns your trust, and communicates in splendid fashion, you can allow for more fudge room when life happens.

Being firm in the beginning often gives you more flexibility later, as was the case with a prior tenant of mine. After many solid years of on-time rental payments, she was injured and had some financial difficulty. By this time, I was willing to work with her on being late and making split payments. 

Great tenants are extremely hard to find and are your most valuable asset. It’s much cheaper to help them through the hard times than it is to replace them.

Rental Property Investing Is Not Exactly Passive

While people love real estate investing for its passive income, it’s not a passive activity at all. You will eventually deal with excuses, broken appliances, strange smells, expensive repairs, and more. My phone woke me up at 3:30 one morning because my tenant locked herself out of the apartment. I had to drag myself out of bed, drive to town, and let her in. I wasn’t even mad because she wasn’t stumbling home from a long night of carousing. She was actually trying to make it to her early morning work shift.  

That’s the balancing act of being a landlord. You have to be firm enough that people don’t take advantage of you, but reasonable enough to recognize when someone is genuinely trying.

The best tenants are worth keeping, which means bending a little at times. The worst tenants will teach you lessons you’ll never forget. Either way, if you stay consistent, use good judgment, and refuse to cut corners during the screening process, you’ll usually do just fine.