When you're a landlord, most of your time is spent dealing with maintenance and tenant issues. If you're lucky (and you've done your homework), your tenants don't cause too many problems - and the problems that do crop up are minor.
However, despite your best intentions, the person who looked like a great tenant on paper can become the tenant from hell. Bad tenants cause real headaches, for a number of reasons:
- Evicting and replacing them is aggravating, costly, and time consuming
- Their disruptive and noisy behaviors can drive out your good tenants
- They can cost you big money if they damage your property
Before I give you my hard-earned advice about how to find and keep good tenants, let me first describe the four types of bad tenants.
Deadbeats - Simple - these are the people who don't pay their rent.
Demanders - These types of tenants drive you crazy with their incessant demands. On the other hand, demanders are usually the best bad tenants to have because they have high expectations for themselves as well and are usually well-behaved and neat.
Disrupters - The worst kind of tenant: These people drive everyone else in the building crazy by playing loud music, arguing, or exhibiting other disruptive behaviors.
Destroyers - Not to be confused with a renter who accidentally breaks something, destroyers are the type that repair their motorcycles on your new carpeting or get drunk and break your windows.
So how do you weed out the deadbeats and destroyers? In addition, how do you work with the demanders and disrupters so they don't drive you and everyone else insane? What follows are my six tips for finding and keeping good tenants:
- Check all references
As with job references, a prospective tenant's previous landlord won't give honest feedback because they're afraid of being sued. When conducting your reference checks, instead of asking questions regarding a prospective tenant's character (e.g.: "Was this person a good tenant?"), ask questions based on facts that can be documented.
You can ask, for example, if the tenant paid his rent on time each and every month and whether he had any late payments. You can also ask for any incidents of property damage or disruptive behaviors.
It also pays to verify job and income history to ensure your potential tenant can pay the rent each month.
While still useful, a credit check is less important. Due to divorce or medical issues, people find themselves having to sell the family home and become renters. Such events can kill someone's credit in the short-term - which is why it's much more important to verify job and income history. A person who is working and making good money will often be grateful for the opportunity to help put his life back together by being a good renter.
- Set clear expectations from the get-go
Many tenant problems can be traced back to the landlord's failure to set clear rules and consistently stick to them. In addition to stating when the rent is due, the lease should also state any rules about modifying the property, acceptable noise levels, any building-wide rules (e.g. no on-property vehicle repairs, no pets, etc.), and contacting the landlord.
During the lease signing, you should go over these rules and expectations in detail to be sure your tenant understands them.
- Learn how to "read" potential tenants
As with anything, you cannot pre-judge people based on appearance. One of my best tenants had long hair, biker boots, and tattoos when I was landlordind. One of my worst tenants was a gentleman in immaculately pressed slacks, tassel loafers, and a designer polo shirt. When meeting potential tenants, watch for the following:
- Over-eagerness - Your landlord "antennae" should be humming if someone wants the place right away - like now. This could mean that they need to get out of their current situation fast.
- Lateness - If a potential renter shows up to the appointment late, doesn't return calls, or seems unreliable, pay attention. Usually this type of person will be unreliable in terms of paying the rent, too.
- General weirdness - Always pay attention if someone makes the hairs on the back of your neck stand up or if he or she just seems "off" in any way. Often times we dismiss our suspicions, only to find out later that we were right about our instincts.
As I said, demanders are the best type of bad tenant to have - they demand things because they have such high expectations, which means they want to keep a property looking nice and well-maintained.
To keep demanding tenants at bay, especially those who expect you to rush out at midnight to fix a broken light switch, give all your tenants a cell phone number they can call to report any problems, rather than your home phone or business number. Let them know what hours they can expect to reach you, then be sure to check for messages regularly.
Give disrupters the benefit of the doubt at first. People used to living in detached homes forget how noise travels through the walls of apartment buildings, so they may not be aware that their loud music or late night guitar playing is bothering others. Often, just asking them to turn down the volume is enough, but if the problem persists, they've got to go.
- Enlist the help of tenants you can trust
As a landlord, you want to know immediately if there's a real emergency with your building - for example, if it's on fire or a water main is busted. However, you don't want to give out your home or business numbers on the lease - because then you have those pesky demanders calling you night and day.
In this case, you'll want to find the most reliable and trustworthy tenant you have and give him or her your personal phone numbers - with instructions they're to be used for emergency purposes only.
- Be a great landlord
The best way to minimize bad tenant problems is to be a good landlord to begin with. This means staying on top of things and keeping your promises. Be proactive about maintaining your property, promptly fix things when they're broken, and ensure contractors and repair people arrive when promised.
In short, treat your tenants they way you would want to be treated. You wouldn't want to sleep in a bedroom with a broken storm window in the middle of winter - and neither do your tenants.
Finding and keeping great tenants takes some time and due diligence, but your efforts will pay off. State your expectations and rules up front, conduct full reference and job/income checks, and maintain your rental properties as if you lived in them. Your tenants will thank you.