Investing In Real Estate

230 DEVELOP THE BEST LEASE
Wear and Tear
Leases often state that tenants retain responsibility for all damages except
normal wear and tear. I never use such a clause. It invites tenant neglect
and abuse. Many tenants believe that soiled and stained carpets, cracked
plaster, broken windows, and other various damages reflect nothing more
than “normal wear and tear.”
I disagree. If a tenant properly cares for a property, that property will
not suffer any noticeable wear and tear during a tenancy of one year or less.
For such short-term periods of residence, tenants should leave the property
in essentially the same condition in which they accepted it. Eliminate the
“wear and tear” clause. It will save you money and argument.
Lawful Use of Premises
As good business, and as a good-neighbor policy, require tenants to abide
by all applicable laws, ordinances, and regulations. For example, enforce a
zero-tolerance rule against illegal drugs. Various ordinances also apply to
property use, parking, noise, pet control, occupancy limits, yard care, and
a multitude of other issues.
In some instances, the law not only punishes tenants but also property
owners who tolerate those tenants who violate government rules. In
addition, this clause will give you authority to stop behavior that causes
offense—even though the police or other government authorities choose
to let it slide from their enforcement.
Notice
To reduce rent loss during periods of turnover, require tenants to give
advance notice of the exact date they plan to end their tenancy and
completely vacate the property. In that way, you can begin to publicize
the unit’s upcoming availability. Ideally, you’ll find a new tenant
who will move in within a day or two after the previous tenants have
moved out.
Most owners require 30 days’ written notice. If you’re operating in a
weak or seasonal rental market, you might ask for 45 or 60 days’ notice.
If you expect strong and immediate demand for your rental property,
you could reduce your advance notice to, say, 15 days. Tie your written
notice requirement to the length of time it will take to locate a new, highly
desirable tenant (or to avoid missing a peak rent-up period as exists in
college and resort towns).