Renting out one’s property is a lucrative investment for any homeowner. Whether you enjoy the passive income or could use the extra money for mortgage payments, having tenants can be a great help. However, any landlord who rents out their home should be equipped to deal with poor tenants. You probably heard of nightmare tenant stories, from squatters to partiers and everything in between. In this article, we hope to educate you on the most common types of poor tenants and how to deal with them.
Types of poor tenants
Before we begin, we should note that bad tenants don’t have to exhibit extreme behaviors to be considered difficult to deal with. Indeed, your lessee may be pleasant to converse with and great communicators. However, if they’re missing payments or breaking rules, you don’t need to cut them slack. For now, here’s our list of commonly seen poor tenants you may find yourself facing.
Every landlord’s worst nightmare is a squatter. A squatter is someone who occupies your property and refuses to leave. While these cases have been blowing up with the rise of Airbnb, squatting is still a possibility for traditional rental relationships. It’s pretty easy to identify when you have a squatter on your hands. If they refuse to leave the property, refuse to let you enter the property, or even threaten to bring you to court, they’re a squatter.
Another type of poor tenant is a late payer. These types of lessees are difficult to deal with because they often make excuses or promise to pay soon. They might pay on time for the first few months, but for whatever reason, end up accumulating late payments. Consequently, you may find yourself having trouble paying mortgage and other bills if you rely on their rent. One quick tip is to include specific payment terms in your contract. For example, you may discuss a potential late fee, strike system, or even eviction section.
Of course, we all know the characteristics of a party animal. These types of poor tenants will invite people over, play loud music, and risk damaging the property. Your neighbors will likely complain about the noise level, late-night activity, cars taking up street space, and general conduct of these tenants. Indeed, by renting your property to a party animal, you risk good rapport with your neighbors among other consequences.
This class of poor tenant is more difficult to identify. If you visit the home and notice common areas were made into makeshift bedrooms, and that there’s more people than you signed onto your lease, you’re dealing with an open-shelter tenant. These lessees typically offer a place to stay for friends and family either for free or a percentage of their monthly rent. This essentially means you’re losing money because more people are covering a smaller rental rate.
These types of poor tenants mainly affect landlords with a strict no-pet rule. However, the consequences of pets can eventually damage any property. If a potential lessee asks whether pets are allowed, they likely have one. After they move out, you may have to make property repairs to fix bad odors or unclean carpets.
Finally, the last common type of poor tenant is a property destroyer. These people may either make unnecessary bad repairs to the home, or fail to maintain it. The bathroom and kitchen may develop mold, the screen door may be broken, the lawn may be in shambles, etc. On the other hand, you might notice an attempted construction project on a wall or doorframe that never got finished. These tenants destroy the house during their lease, leaving you to drain money into repairs.
Protect yourself against poor tenants
Before signing a lease with any potential tenant, you should take these mandatory precautions. During any rental contract, you should also take steps to keep your tenant’s behavior in check.
Always screen your tenants
Screening everyone is absolutely mandatory to ensure you won’t deal with poor tenants. This includes a background check, a credit check, and verifying income. Actually, the rule of thumb is that a tenant should make at least 3 times the amount of their rent every month. In addition, contacting their previous landlords gives you insight on their past behavior as tenants. This is good for raising red flags early. Don’t know how to properly screen potential tenants? Avail has a great guide to tenant screening that you’re encouraged to check out.
Set rules in your contract
Be prepared for any potential problems by setting rules. Don’t want late-night complaints from neighbors? Set a mandatory quiet hour or curfew. Want to lessen the damage made on your property? Outline your lessee’s responsibility to property maintenance. After this, you should set consequences such as a strike system or end-of-lease agreement. By setting rules beforehand, you are able to act on their poor behavior if it happens. Remember, it’s vital that you get everything in writing and have it signed by the tenant. This makes your contract legally binding. If you need somewhere to start, check out Nolo’s Ten Terms to Include in Your Lease Agreement.
Once you outlined all your terms in the lease agreement, stick to them. Don’t let late payments, rule breaking, or other poor behavior slide. By sticking firmly to your rules, you send the message that you’re not playing around. If they break an agreement, carry out the agreed-upon consequence.
Evict when necessary
In addition to the previous note, don’t be afraid of eviction. If you and your tenant signed to uphold a contract, you are legally able to evict them if certain rules were broken. Remember, a lease is a 50/50 relationship. If your tenant isn’t acting accordingly, you are within your rights to end that relationship. If you need a refresher, Landlordology offers a step-by-step guide to evicting tenants.
Reach out to us!
Sometimes it’s too late to act on the damages a poor tenant leaves behind. If your tenant left behind a weird odor, property damages, and other high-cost repairs, consider selling your home to a house-buying company. House-buying companies will purchase your home off you, unmade repairs and all, for a fair cash price. Do you live in or around Macomb County, Michigan? Deal with us! We’d love to check out your home and do business. For a fair cash offer, visit our home page. For any other inquiries you may have, feel free to call us at 586-200-1710.