When you invest in real estate to rent out, you will always have a chance to get somebody who appears decent at first, but then all hell breaks lose a couple months later. Is there a way to avoid or to be able to tell these kinds of tenants apart? Let me start with listing the different types of tenants you want to stay away from.
1 – These are thepeople who never pay their rent on time. The idea for this business is to get paid monthly without having to track people down for your money every month, and any tenant who doesn’t pay on time can cause you a great deal of stress.
This is why I recommend doing credit and reference checks on the tenants BEFORE you sign the lease. This will let you know if they are people who pay their bills, or if they have bad credit. If you end up having somebody that isn’t paying you, you may not be able to simply just evict them.
Tenants have rights as well, and you may have to go to a court and explain to a judge why you think that they should be evicted and describe the bad behaviours the tenant is having.
2 – The socialists tenant is what you will be more likely to have if your rental property is close to a college campus or other schools and programs. These types of tenants can be very disruptive and destructive at most. They may play loud music all hours of the night, or even abuse the property and cause damages that you will have to end up paying for.
The best way that I’ve found on handling these types of cases, is to inform the tenant that they are on a short leash, as well as having a shorter than normal lease period. This would be incase they end up being horrible tenants, there will be opportunity for you to act, or to just renew the lease.
3 – It’s always best to stay clear of tenants with pets if at all possible. Not all pets will be a problem, but in some situations it can leave the property disastrous. In one particular case that I’ve heard of, a tenant was raising pigeons as pets, and had dozens of them in his apartment. After he moved out the landlord went to look at the property, and it was covered in bird faeces and feathers. Nobody wants to be put into this situation, so the best way to handle it is to not allow pets in the first place.
Regardless of your rules, a lot of tenants will sneak in pets without you knowing, only to discover torn up carpets, holes in the backyard, and more when you finally come back to the property after the tenants have moved out. One way to control this, is to take visits to the property to inspect and see if there ARE pets around. Even if you don’t see any animals, keep a look out for pet food or water on the ground.
4 – Extended families can be a form of a bad tenant. You might meet with a potential tenant and they are the best person in the world, but if they let an unreasonable number of people live in their home this could take a toll on you. They might turn the living room and kitchen into bedrooms and cause you unnecessary charges afterward unless you stop this in advance.
There is no way of finding this out until it happens. Again, inspections would tell you everything you need to know. Another option would be to just drive by your property every once in awhile and see if there are a number of vehicles parked or a large number of people in the property.
5 – The bureaucrats. These tenants won’t emerge until after they have moved out. This doesn’t sound like it’s a problem if they are already gone, but it occurrs when you go to the property, and maybe you find some damages. You would deduct the damages from the tenants deposit. They can, in some cases, get very mad and get you tied up in legal battles for months. There is really no way to avoid these tenants.
So in all honesty..is there a way that you can actually avoid nightmare tenants? The blunt answer is no, there is no guarantee way to avoid them; HOWEVER, there are steps that you can take to try and weed some of the worse ones out.
References are huge. If you request this, you will get to speak to previous landlords or property owners, and see what kind of people they are, how they left their own property, etc. By seeing how they were before, you can make a better judge of how they are going to be with you.
Credit checks are another big step you could take to try and avoid bad tenants. You will see if the tenant can make monthly payments, or if they have had problems in the past. If they have had trouble before, it may be a better idea to move onto somebody else that checks out better.
Inspections are the last step I would like to give to you. This obviously comes during the time period that the tenant is living in the property, and while it may already be too late and you spot a lot of damage, it would be better to find it and fix it then, rather than to find it when the tenants move out and it’s only gotten worse. Just remember that you have to give ample notice to the tenant that you are coming to inspecting the property. Tenants have rule and rights as well, and you can not just do whatever you want because you own the property.
So just be careful, and check up on all of your sources and tenants. It’s best to be too cautious in some cases than not in order to not regret the tenants that you have chosen for your desired property.
ABOUT THE AUTHOR
James Scott runs a company designed to help give people important information on topics relating to investing in real estate.
DISCLAIMER: READ CAREFULLY: The information provided in this article is not considered legal advice and is given only for information purposes. ALWAYS SEEK THE ADVICE OF YOUR LEGAL COUNSEL.