Bad tenants are bad news for you, your other tenants, and their neighbors.
Even when you’ve made every effort to rent to the right tenants, there’s still a chance that one or two of them will be problematic. Hopefully, you never have to deal with bad tenants, but in the event that you do, it’s best to be aware of how to lawfully handle the situation. In this article, we discuss some of the most common problems caused by bad tenants and offer our suggestions on how you can deal with them.
Problem #1: Late Rent Payments
One of the most common problems faced by landlords is non-payment of monthly rent. Whether the tenant has paid partially or hasn’t paid a penny, not receiving the rent in full can put a dent in your cash flow. Remember, you need rent to be able to pay your bills. Without it, you’d have to pay out of pocket – that is, if you have anything in your pocket.
It’s important to understand that, in most cases, tenants aren’t intentionally withholding rent. Chances are, they’re simply short on cash. Talk to your tenant to find out why they’re habitually late on rent and what you can do to be more accommodating. Here are some practical tips for dealing with overdue payments on your rental property.
To encourage tenants to pay on time, consider sending payment reminders through a tenant portal or your property management company. Sometimes, due dates simply slip your tenant’s mind. You should also set strict policies that spell out what the penalties are for late rent payments.
Problem #2: Disturbing Neighbors
You can’t predict how your tenants will act, but you should be able to get a grip on them if they’re causing problems in the community. Playing loud music, partying ‘’til midnight, throwing trash in the wrong places, etc. are all actions that can create unpleasant conditions for other people. When that happens, your tenants are bound to be in disagreement with their neighbors.
As the rental owner, you don’t always need to intervene. In most cases, the two parties will work things out on their own. However, if your tenant refuses to be courteous toward their neighbor or cooperate, intervention may be the best option. In that case, you will have to help the parties involved by being the mediator. You could also ask an impartial party such as a property management firm to handle the dispute for you. This is because, as the rental owner, you may be biased toward your tenants.
Problem #3: Property Damage
Your tenants don’t have the initiative to care for the property. After all, it isn’t theirs, so why would they use their weekends to mow the lawn, clean the carpets, and scrub the bathroom floors? While some tenants will care for the property as if it were their own, many won’t. They end up doing worse than not cleaning up – they cause damage to the property.
When the damage has been done, you’ll need to prepare an estimate of how much the cost of repairs will be. You can then deduct the amount from your tenant’s security deposit. To protect yourself (in case your tenant claims they shouldn’t be charged), you should have documentation of the property’s condition. Ideally, this documentation should be prepared even before the tenant moves into the property. Pictures, videos, and more can act as evidence to show the court that your tenant was the one who caused the damage.
Problem #4: Illegal Use of the Property
This is one of the most serious problems you can face, and one that should be dealt with immediately. If you find out that your tenant is involved in illegal activities (e.g. selling and manufacturing illegal drugs from your property), you can’t turn a blind eye, otherwise, you will also be held liable. Your failure to turn your tenant in for their crimes can be seen as your consent for the activity. In other words, the court may think that you’re in on it, too.
Since this is a sensitive matter, you should consult your legal counsel, or if you don’t have one, your property management company’s in-house legal team. Don’t try to find proof of yourself – not only is it dangerous, but because you’ll have to give your tenants advance notice, that gives them time to clean up their crime. Alert the authorities instead.
Problem #5: Subletting
Subletting is when tenants try to rent out the property to other people. They usually do this to get someone else to continue their lease. As the landlord, you can decide whether or not to allow it, but do note that it can cause a slew of problems for you. Since the sublessee is essentially your tenant’s tenant, you don’t have a hold on them. For example, if the sublessee stops paying your tenant rent, you can’t collect rent from the sublessee because they aren’t your tenant. Your tenant is responsible for their sublessee. With that said, it’s best not to allow subleases at all.
You can, however, allow guests, but be sure to prohibit tenants from having guests over for long periods of time. Their guests can stay for a day or two, but not to the point where it’s as if they’re already living there.
Avoid Bad Tenants by Hiring a Property Management Company
The best way to protect yourself from bad tenants is by partnering with a property management company with a tried-and-tested screening process. From conducting background checks to character references, a professional company will make sure to run every tenant past their strict procedure. Screening tenants should be non-negotiable as it’s your “first line of defense” against tenants who might not be able to pay rent, be disrespectful to your property, and be rude to their neighbors. By signing the lease agreements of only trustworthy tenants, you can be guaranteed that they will care for your property and be easy to deal with down the road.
At Luxury Property Care, we’ve developed our own multi-step screening process to make sure we pick the perfect tenants. When you choose us as your partner in luxury home management, you can reduce the risk of renting to rule-breakers who may be the reason why you don’t see success. If you have a rental property in South Florida, call (561) 944 – 2992 today or complete our contact form to schedule a commitment-free consultation.