Owning rental properties can be a nice way to have a regular income coming in.
But, when a person owns rental property, they have responsibilities and must make sure they have good tenants who pay their rent on time and do not damage the property.
Everyone tries to vet their prospective tenants to avoid problems later but, sometimes, a tenant that looks good on paper turns out to be a serious problem in real life.
Here are seven strategies for dealing with bad tenants.
The Most Common Problem is Tenants Who Don’t Pay Their Rent
Things change. A tenant that looked good on paper and had decent credit ratings can lose a job, a marriage can break up, a roommate can leave, or other problems occur in a tenant’s life.
When they start being late with the rent and then stop paying rent at all, it is time to act quickly and decisively. It is important to contact the tenant with the first late rental payment notice. Communicate with them to find out what problems they are having. Is the late rental a one-time problem?
Do they need some kind of assistance? If this is an ongoing problem, and the tenant doesn’t seem willing to seek assistance, it may be time to consult a Debt Collection Agency.
The agency will know what legal steps to take. The landlord might need to send the tenant a copy of the lease they signed with the rental payment rules highlighted.
- The lease should spell out clearly what the rules for rent payment are. What happens when there are late payments should be clearly stated. Make it clear to all new tenants that the policies are firm and will be enforced. Consider having late payment fines after a specified time.
- Treat all tenants the same with regard to rent payments. All renters should be held to the same guidelines and lease stipulations.
- Create a system of reminders for the renters when the lease has a built-in grace period. A built-in reminder for tenants missing the rent due date may help.
- When tenants fail to pay their rent, serve them with a Nonpayment of Rent Notice. This termination notice informs the tenant that they must pay their rent at a specified time or leave.
7 strategies to Deal With Difficult Tenants
Though there are remedies for each type of bad tenant there are common strategies that help landlords deal with all tenants.
- Make a practice of being rational, calm, and objective with all tenants. Being emotional does not help. Anger can make things worse. Try to evaluate each problem from everyone’s point of view to come up with a solution that can work. Tenants will react more positively to a person who is calm and collected. Treat tenant issues with confidentiality and schedule time to calmly discuss the issue. Be on time for the appointment.
- Keep written records with dates and times for every problem from late rent to disruptive behavior. This includes documenting tenant complaints about loud noise, property damage, and other issues so the bad tenant cannot dispute the claims later. Taking pictures of damage is also helpful. Having the tenant sign the statement will also help.
- Let the tenants know from the beginning how you expect to be treated. Tenant-landlord relationships can be difficult, and the landlord should set up rules and standards immediately. No one wants a tenant to take advantage of them. Stand firmly behind the clear rules stated in the lease to avoid future problems. Follow up with problems the tenant has caused to make sure the issue is resolved or give them negative consequences.
- Make an effort to have your tenants on your side. Create a good relationship with all tenants by being kind, patient, and responding to emails or other complaints quickly. Having a decent relationship with tenants makes it more likely they will comply with your rules and requests.
- When it becomes necessary, ask difficult tenants to leave. Difficult tenants make life hard for everyone from the other tenants to the landlord. Try asking them to leave voluntarily. Do this by sending them a Written Notice to Vacate according to the lease terms. Enclose a copy of the lease with the appropriate parts highlighted. This can be followed by a legal eviction process if they refuse to leave voluntarily.
- Begin an eviction process as a last resort. Know the eviction laws in your state. In some states, there are only three reasons to evict, including failure to pay rent, failing to move out at the end of a lease, and violating written lease terms.
- Hire an experienced, dependable property manager or management company. They can act as a go-between between the owner and tenants. Property management companies are often well worth the investment.
What Do Property Management Companies Offer?
Property management companies should offer these services at reasonable rates. Be sure to talk to several management companies and compare their services vs. the fee structures.
- New tenant screening
- Property vacancy advertising
- 24/7 maintenance
- Move in/move out inspections and reports
- A lawsuit and eviction services
- Rent collection
- Rental Registration
- Lead paint inspection and compliance
- Annual and monthly financial statements
- Monthly property reports
The first and best defense to eliminating problem tenants is careful screening. Make sure the management company uses good screening processes. keep track of how many problem tenants must be dealt with.
If too many tenants cause problems, the screening process might need to be improved. Property owners who do not have property managers should seek advice on the best screening process to use to avoid tenant problems.
Think About Safety
When dealing with difficult tenants, be aware of safety issues. If a tenant is putting others in danger, do not hesitate to call the police
One example is if you believe a tenant is engaged in illegal activities or has threatened other tenants or you. Do not go alone to meet with a tenant in their unit if you feel unsafe or threatened. Having a clear and complete lease agreement is essential.