Make Sure You Have a Good Lease for Protection Against Bad Tenants

There are two common types of leases: 1. year-to-year lease and, 2. month-to-month lease. You may think that you are locking in a tenant for a year, in a year to year lease, but you are also locking yourself in, and it is much harder to remove a tenant with a year to year lease.

The Value of a Month to Month Lease

My policy is to use a month-to-month lease whenever possible. This way, if you have a tenant that you want to get rid of, it’s easier to do. These are tenants who are disturbing the neighbors, they don’t take care of the place, or they consistently pay late. Just cancel the contract and the bad tenants must be out in 30 days. No court fights, no mess.

Modify Your Lease

Feel free to modify a lease contract to make the tenants behave the way that you want them to. Nothing is set in stone. It’s your contract. Mold it into something that works.

For example, I found my tenants making oil changes and auto repairs in the driveway of one of my properties. I didn’t want to encourage that type of activity, so before the next tenants move in, I just added a sentence to the lease contract saying that those things are not permitted.

Some of the key components of my lease include:

• tenants are responsible for paying utilities (electricity, gas and water). If the landlord pays any utilities you are encouraging the tenants to be wasteful;
• tenants cannot paint or make any significant changes to the landscaping without permission;
• no smoking is allowed inside the house;
• and, tenants must maintain outdoor plants.

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3 Responses to “Make Sure You Have a Good Lease for Protection Against Bad Tenants”

  1. […] of the biggest gripes of real estate investors is dealing with problem tenants. In fact, based on what I have heard from former investors that I have talked to, that is probably […]

  2. […] strategy, the investors can quality for the least expensive loan, the owner-occupied loan. There is no need to worry about tenants destroying your rental property or not paying the rent. You completely control the investment by […]

  3. […] Use a month to month lease instead of long-term lease to more easily scrape off bad tenants like […]

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