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When buying a long-term rental investment property, you want to keep a tenant a tenant longer than normal. What’s normal? How can you keep a well-paying tenant way past that 1st year?
A rental agreement between an angry tenant and an unhappy landlord will not have a long shelf life.
In Costa Rica, a lease agreement is for 3 years, although most landlords allow for termination after the first year. Most tenants though, stay for only one year and then move on. Often that happens because they’re fed up with their landlord.
There are many reasons for a landlord to try to keep renters longer than that one year. As a smart landlord, you’ll be looking for someone who leases your rental unit for the rest of your life, if it’s a good tenant who pays on time. It’s less of a hassle, cheaper on maintenance, and therefore a better return on your investment.
There are ways to increase the tenant’s appeal to your rental property. And sometimes incentives are cheaper than having the property vacant for months until you find the next victim. For one more year…
Let’s find out what you can do to keep tenants longer than normal now:
1. Don’t be greedy
A lessee who can afford the monthly payments gives fewer problems than one who must struggle to make the payments. Once your tenant has moved in, he/she will get to know the neighborhood or condominium and other landlords will try to convince them to move.
Therefore, if your tenant is happy and knows that you’re not greedy, he/she will stay. If you feel comfortable with a new candidate to rent your property, it’s often a good idea to give a discount or do something extra for them.
2. Before delivering possession
Make sure the unit is in great shape before you deliver possession to your tenant. You want to fix everything that needs fixing and refresh paint, change lightbulbs, etc. Only that way you can expect your new tenant to be happy and take care of your property the way you’d like to.
If there are rugs, check if any deep cleaning is needed. Check on the plumbing and make sure it’s all functional. It saves lots of trouble down the road.
3. Enforce rules in a friendly way
Be clear about your rules ahead of time and put them in writing. Put issues about pet deposits, parties, repairs, and monthly payments.
If your lessee breaks the rules, first ask for a meeting before taking any action.
4. Address emergency maintenance quickly
Good maintenance of your rental unit is to your own advantage. If you’re proactive with the property maintenance, the lessee will not be afraid of asking for repairs.
If you don’t repair when asked, the tenant will either not repair anything or do a cheap job on it. This way, your property will deteriorate pretty quickly!
5. Don’t wait for emergencies
Check with your renter a couple of times a year if all is well in the apartment and if he/she has any complaints. It’s so easy to maintain a friendly relationship and not just wait for the monthly rent deposit.
6. Be fair
Put yourself in their shoes. The human factor has more importance than you might think. If you are fair, friendly, respectful, and make yourself accessible, your tenant will happily pay you every month.
7. Lease renewal
Be proactive with your lease renewal. Tell your lessee well in advance that you are interested to renew the lease for another 3-year period. In case your tenant decides to move, this will give you plenty of time to start looking for another one too. When the lessee starts looking at other options, he/she might decide it’s better to stay and renew.
8. Return deposits
Returning the deposits is part of doing business honestly, here, and everywhere else. Costa Rica is a small country and word gets around pretty quickly that you kept someone’s deposit without reason. Complaints on social media can damage your reputation if you have any.
Unfortunately, tenant screening services do not exist in Costa Rica. If your renter is foreign, you could try checking in the country of origin. Asking for references is an option. But you’ll find that talking to your future tenant and common sense will be more important than a credit check.
Replacing a good tenant is not so easy. The cost of having an empty unit for a long time is expensive. Do the numbers and you’ll find it’s easier to keep a happy lessee than replacing one.
Are you looking to invest in a rental property in Costa Rica? Feel free to contact us now.