If you ask any owner about what are the “keys to success” with owning investment properties they will tell you that it’s either Portland Oregon Property Management, tenant screening, consistent maintenance or all of the above.
The reality is that there are many areas that will benefit you when you own investment properties but the real “key to success” when it comes to consistent ROI is lease enforcement.
Lease enforcement is quite simply taking the time during the year to inspect your investment property and make sure that your tenant is following every rule of your lease while doing their absolute best to keep the property well maintained.
Why Lease Enforcement Is Important
Sadly, many investors who are self-managing their properties don’t take the time to enforce their leases because they want to take people at their word that they will follow their lease, or they don’t have a lease at all and instead have a “handshake” agreement with their tenant.
Either way, owners who don’t follow their leases are setting themselves up for trouble because some tenants who don’t have leases to follow will just assume that they can do anything they want at the rental property and the owner is the one who ultimately will pay for it later.
Make Sure Your Tenants Are Fulfilling Their “Duties of Tenants”
In addition to the other terms and obligations spelled out in the lease agreement, the tenant also has an obligation to maintain the premises. The responsibilities include:
Following Buildings and Housing Codes – Tenants must abide by the sections of these codes that apply to tenants. These portions often focus on safety and health standards.
Keeping the Unit Safe and Sanitary – Tenants must keep they’re actually dwelling in a “reasonably” safe and clean condition. The unit does not have to be immaculate or free from clutter, it just must be free from safety hazards such as blocked fire escapes or sanitary hazards such as dog excrement.
Disposing of Garbage – Tenants have the responsibility of not allowing garbage, debris, and other waste to accumulate inside their apartments. Such waste must be disposed of in a clean and safe manner.
Maintaining Plumbing Fixtures – Tenants must do their best to keep all plumbing fixtures they use, such as the toilet or shower, in a clean condition.
Properly Operating All Plumbing and Electric Fixtures – Tenants are obligated to operate all electrical, plumbing, heating, cooling or other facilities according to their intended use. Doing so will minimize the risk of damage or sanitary or safety issues.
Maintaining Appliances Supplied by the Landlord – In the same vein, tenants are also responsible for taking the proper care of stoves, refrigerators, dishwashers, washers, dryers or any other appliances that have been supplied by the landlord. These appliances should only be used for their intended purposes and should be kept in a “reasonably” clean condition.
Not Damaging the Unit – It is the responsibility of the tenant to make sure he or she, any of their guests, or anyone they allow onto the property, does not damage the unit or any other part of the premises they have access to, including the common area, basement, or backyard. This includes deliberately damaging or destroying, damaging by neglect, or removing any part of the property.
Respecting Other Neighbors’ Peace and Quiet – Tenants and any individuals they allow onto the premises have the obligation to conduct themselves in a way that will not be disruptive to their neighbors. This could include refraining from playing loud music or from allowing children to run and scream around the property.
Refraining from the Use of Illegal Drugs or Other Controlled Substances – Tenants or their guests must not use or distribute any controlled substances or other illegal or dangerous drugs on the premises. This could not only result in violating their lease agreement, but it could also result in legal action being taken against them by the local government.
Not Tampering with Smoke or Carbon Monoxide Detectors – Tenants must never tamper with smoke or carbon monoxide detectors. This includes removing batteries, removing the detector completely, or damaging the detector.
Not Disturbing Paint in Homes Built Before 1978 – Homes constructed before 1978 may contain lead-based paint and thus could also contain lead paint hazards. If it is a required condition in the lease agreement, tenants must notify their landlords before they paint or perform any actions or alterations that could disturb painted surfaces.
Preventing Mold Growth – Tenants must make an effort to prevent moisture accumulation in their unit that could lead to the growth of mold. This includes not allowing standing water. If the tenant notices any moisture accumulation, soft spots caused by water in walls or ceilings or any visible mold growth, they must immediately notify the landlord.
What Should You Do If You Don’t Have A Lease?
Let’s say that you don’t have a lease, the good news is that you can always fall back on state laws for holding your tenant accountable for their behavior. For example:
Waste – This often occurs when a tenant purposely destroys or even diminishes the value of the rental property.
Nuisance – Although you may think this term refers to your tenant doing something that may bother you, the legal definition is anything that can be classified as “criminal activity”. Some of the most common nuisance activities include drugs, prostitution, or any other type of activity that may diminish the value of your investment property.
Illegal Use – Let’s say that you found out that your Portland Oregon tenant has been growing marijuana, engaging in criminal activity, or running a commercial business from the property. These are perfect examples of illegal use and they give you ample opportunity to evict your tenant.
Regular Lease Enforcement Saves Time and Money
If it’s been a while since you last took the time to enforce your lease, you should schedule an appointment with your tenant to inspect your rental property. At the very least, you should drive by your property to make sure that there are not multiple vehicles in the driveway which could be an indicator that there are people living in the property who are not on your lease
If you plan on scheduling an inspection, don’t forget that you are obligated to post a 24-hour notice to enter the property because even though you may own the property, you can’t just show up to enter your rental whenever you want.
Yes, lease enforcement is the key to consistent investment property ROI since it will save you the time and hassle of finding out too late that your tenants are not following your lease or their duties as tenants.
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