The single biggest reason people do not own rental property is the maintenance issues that arise from tenants. We have all heard the stories; the tenant locks themselves out of the house at 2am, the tenant calls because of a plumbing leak while you are on vacation, or the tenant needs help because they just lost heat in the middle of a blizzard.
It is true that all of these issues could arise. The reason I am a huge advocate of rent to own is that you can eliminate 95% of these calls. It is VERY rare for me to get a phone call asking for maintenance help on any of my rent to own properties.
When I I fill my properties with rent to own tenants I take a three prong approach to handling maintenance issues.
- Be clear at the lease signing
- Maintenance Request forms
- Taking the phone call
Be clear at the lease signing
When I sign the lease with the tenant I go very slow with two section of my lease. When the payments are due and what happens when it is late AND how we deal with maintenance. My lease states that the tenant is responsible for ALL maintenance. When I hit this section I explain it like this:
Me: Mr and Mrs Tenant, you really want to own this house right?
Tenant – Yes
Me – Do you understand that you are buying this property using a rent to own and that I am working with you to own this house?
Tenant – Yes
Me – Since you are buying this house you are going to be responsible for the maintenance. With that being said, if there is a major problem I want you to let me know and maybe I will be able to help you out with the cost. But other than a major problem I don’t want phone call with maintenance issues. Is that fair?
Tenant – Yep
At the time of the lease signing the Tenant is in their best mood and is excited about the house so they will happily agree to this.
Maintenance Request forms
One of the last forms I give the tenant after the lease is signed is my Maintenance Request Form. This is the form that I require my tenant give me when they have a maintenance request. By forcing the requests in writing it helps me be sure the issue is resolved and provides a paper trail of all requests and actions taken. It also prevents minor maintenance issues because often times the Tenant will lose this form and would rather fix the issue themselves than to tell me they are not responsible and lost the form.
When I get to the point I am handing them this form I explain that they can call me if they need to but that I will ask them to complete this form if there is a major maintenance problem. I again tell them this is only for major issues and to be sure to save it because I don’t respond to maintenance requests unless I have them in writing.
Taking the phone call
When I do get a call I ask them to explain what the issue is. If it is something major I simply ask them to send in the Maintenance Request form at which time I will handle the issue. If it is something that will cost less than $200 or $300 I explain that this is not really a major problem and I remind them that they agreed to handle these problems. If I get some push back I might ask them if they would rather convert to a normal tenant landlord relationship and lose their rent credits each month. In no case will I ever handle the maintenance issue myself unless it is a health or safety concern and they tell me they are not going to fix it. I might send them a referral and agree to pay for half but it is their responsibility to be sure it is repaired. This will save you a lot of headache dealing with contractors yourself.