Forbes magazine posted a helpful article entitled: From Homeowner To Landlord: How To Transition Roles Seamlessly
Since most people don’t start out by buying their forever home, that smaller, “starter” home or condominium may be a great option to convert into a rental when it comes time to move on to the next home. The work of finding a tenant can be relatively easy with online resources, but it’s important to stay picky in order to find the right fit. Landlords should look for tenants with high credit scores and excellent rental histories, and who won’t have any issues paying the security deposit.
The article makes several helpful suggestions but I want to focus on one: HAVE WRITTEN POLICIES:
Set policies as to what date the rent is due, how it is to be collected and late fees. Any rules regarding what can or can’t be done with the property should be in the policy and stuck to in order to avoid tenants taking advantage. Never waver from your own written policies. If the tenant is late on a payment, you must charge a late fee despite excuses you may hear. By being strict with late payments, tenants will consider their rent payments higher on the priority scale than other financial obligations. Your extra income when rent is late is your compensation for the financial stress of not getting rent on time.
These written policies need to be in the original lease and signed off by the tenant. I know it is easy to print off a lease off the internet, but these sometimes violate the law. More often though, the contracts don’t make legal sense. Legalese can often be completely wrong if taken out of its context.