Just when you think you have faced every possible scenario as a landlord, a new challenge inevitably pops up. While it’s impossible to conceive of every situation that may occur, it is advantageous to have a few guiding principles that guide your decisions when negotiating with your tenant.
We have discussed keeping your paperwork in order, holding your documents to a high standard, and being clear about your expectations. With all of that said, is there room for compromise in the landlord – tenant relationship? The answer is yes, and here is how. Your goal as a landlord is to protect your physical property and your investment. When a tenant feels like they are getting a concession from you, it may foster good feelings from your tenant. They may feel like they are part of the process. Your job in the compromise is to be sure it is an arrangement you can live with. If you are lucky, there may even be a good outcome for you while giving a tenant something they have asked for.
Just remember that saying yes to one request does not mean that you must agree to every aspect of what your tenant has asked of you. You may just agree to a portion of their requests. You can even give the tenant their choice of options, just be sure that you are happy with any of the options that you present to the tenant.
Compromise: Negotiating with your tenant
There is almost always a way to make money in this process, and after all, making money is the point. For example, if you have a tenant who would like to break the lease early, instead of saying no, you can allow the tenant to leave early by paying a fee. Check your lease, because hopefully you have codified the terms of breaking a lease early. Be sure to reference the appropriate lease term in your correspondence to the tenant who is departing.
If the tenant comes back with a counteroffer or looking for additional compromise, this is a time for you to take a step back and see what is best for your house and your business as a property owner. If the tenant wants to leave even earlier than you expected, consider the time of year and the rental market. During the busy summer season you can probably replace this tenant more easily. A change of tenant is a good time to adjust the rent significantly if the market warrants it. By raising with rent, you may make out even better than if your original tenant had remained under their original terms. The key is to carefully consider whether a compromise puts you in better or worse standing as a landlord.
So what is the best way for a landlord to respond? Here are a few ideas to keep in mind.
Stay Positive – In any situation, there is always a way to look at a positive side. Be sure to stick with options that you can live with. Even if the tenant does not like it, you have to protect your interests. If you have written a strong lease then you will be in a good position to do what is best for yourself.
Don’t make a snap judgement – It is okay to sleep on a message from your tenant before you decide what to do. You don’t want to make a quick decision that will not be right for your business. Taking a short amount of time to think will keep you from agreeing to something that is not in your best interest, and may allow you to agree to an option that will be in your favor over time.
Only offer choices that you can live with – Giving your tenants options allows them to feel that they have a voice in your relationship, which can be a positive development.
Don’t say no for the sake of saying no – Being a landlord is a demanding and sometimes frustrating job. You may not be in the mood to give a tenant a single inch. But saying no for spite will only hurt you. Think about the long term results. For example, installing a fan may actually benefit you over time. If you will make a concession such as this, be sure that you add an addendum to your lease addressing any fees or maintenance pertaining to this change.
Use your paperwork – Remember to have your move in / move out inventory, lease, and any addenda handy. Use your documents to back you up.
Put everything in writing – If it is not in writing then it doesn’t count! No deal is done until it is documented and signed by all parties. Being agreeable to something in a conversation is not the same as agreeing to written terms, so make sure you get it in writing.
At the end of the day, it is possible to allow something that you didn’t originally plan on, make your tenant happy, and also turn it into a win for yourself. Stick to options that will serve your needs as a landlord to ensure your success.