Follow the provisions of your lease to the letter.
To go one step further, before you sign a lease with a tenant, you must have your policies and procedures in place. What I mean by that is what happens when a payment is late. When does the eviction process start? Write this information down, share it with your tenants before you move in.
We have learned from the school of hard knocks that there is seldom a good reason to let your tenants relax when it comes to leases. To date, I’ve only had two tenants who didn’t come to me with a story about why they couldn’t pay their rent on time. From being in the hospital, losing a job, not being able to find a job, etc., the list goes on.
Once you give your tenants a little slack, two things happen. 1) It establishes a past that you’re willing to indulge in, and 2) They won’t be able to catch up, ever!
When you have someone who is in financial difficulty and falls behind on their payments, their ability to catch up is virtually non-existent. To top it off, bad blood forms between you and your tenants, because they don’t like having payments due and all that frustration is directed at you, the landlord.
So, in a nutshell, it’s a no-win situation. If it becomes clear that your tenants will not be able to pay their rent or are violating the terms of the lease, follow the letter of the lease! If there are fines for arrears, enforce them, if they are going to be evicted, start the procedure.
On top of that, if you don’t follow the letter of the lease, you can expose yourself later in the eviction process. Also, when you do what you set as policy, it’s out of your hands. Stories are not allowed, if you are lenient one day and strict the next; your tenants will tell you that you are a bad landlord. If you always do what you say, they may not see you as kind or understanding, but they can never say that you weren’t fair. Being fair and consistent every day is the trademark of a successful business and will eliminate a great deal of stress in the future.