While individual landlords may not operate on a massive scale compared to corporate real estate companies, they may also encounter the same issues that arise from poor landlord practices. Real estate company Invitation Homes, for instance, is now facing a backlash from tenants. A leading real estate investment group offers suggestions on how to avoid such a crisis.
Invitation Homes Gets Hit by Class-Action Lawsuit
Invitation Homes, a vehicle of the private equity giant Blackstone Group, is one of the largest single-family home rental companies in the United States. The company bought thousands of low-cost properties during the last recession and rehabbed them as rentals. Invitation Homes now manages over 82, 000 homes across the country.
The company has recently come under fire with class-action allegations. Accusations include excessive rent increases and fee stacking, as well as complaints of unfixed water leaks, insect infestations, raw sewage seeping into crawl spaces, and broken appliances.
Real estate investors of all types – from those handling a single home to those with growing, diverse portfolios – should take the Invitation Homes fiasco as a piece of real estate education on how to manage properties with good landlord practices.
Good Landlord Practices for Real Estate Management
Protect yourself from lawsuits and allegations by applying good landlord practices no matter the size of your portfolio. The key is to be consistent and fair. Make sure to balance your profits and the welfare of your tenants. Improve your management style with these tips:
- Lay down detailed processes for lease signing and fee assessments.
A major complaint against Invitation Homes is their unfair late payment fee practices, such as forcing residents to pay late fees even when the delay was due to the company’s payment portal issues.
Avoid this problem by developing a formal process for fee assessments. Create an indisputable record of your tenants’ understanding and acceptance of the process. Take note of their acknowledgment and compliance with a signed document or a digital confirmation that will go on their record.
- Enhance your leasing procedures with a discussion on maintenance processes.
Invitation Homes is facing serious complaints of neglecting maintenance requests and providing questionable written documentation that doesn’t match up with tenant reports.
Prevent this problem by establishing a clear maintenance request process in your handbook or lease agreement. Address these key points:
- Protocols on emergency and non-emergency maintenance requests
- A detailed list of associated protocols for common maintenance issues
- Instructions on the tenant’s maintenance responsibilities
- Instructions on the tenant’s appliance responsibilities
- Information on yard clean-up fines, pet clean-up procedures, and other municipal rules
Setting up transparent maintenance guidelines protects not just you and your tenants, but your property as well. Ensure timely maintenance response and documentation to secure your properties.
- Develop a documentation system.
Always communicate issues in writing so you have a tangible record of all problems and their resolution. One way to do this is to have a resident portal where tenants can document interactions and upload images and documents.
Uploaded images of resident issues allow you to gauge the severity of the request and come up with an appropriate action. They also give you strong evidence in case a resident alleges that you ignored maintenance requests, communications, and other issues.
Learn More from Real Estate Mentors and Professionals
Finally, one of the best ways to educate yourself about how to be a good landlord is to join a real estate investors association. Learn from experienced property managers, discover unique strategies, and cultivate a network of peers. Get opportunities that will help you grow not only as a landlord but also as a real estate professional!