People have many fears when deciding to rent their home or contemplating buying an investment property. Horror stories abound about damage and difficult tenants. They have made many movies that portray outrageous tenant situations. Unfortunately, difficulties can arise, and this is why there are property management companies.
Many things go into having a healthy investment. A good landlord insurance policy and a preventative maintenance program are two of them. However, good tenancy is a major key to maintaining your property. So, what do you do when there is a poor tenant in your property?
You have already taken the first positive step by hiring us as your management company. We take proactive steps in reducing the risk of a poor tenancy. However, we know that no matter what measures you take, problems can occur. For instance, we process and select a well-qualified tenant for the property. We require a healthy security deposit and set up the right rental agreements and addendums. We address maintenance problems and tenant complaints.
It may be that the tenants move in and for a while make timely payments and care for the property. Sometime later, the rental payments become difficult because the tenant has lost their job in this difficult economy or there has been a debilitation illness without healthcare. Because of their fear of losing a place to live, they evade the situation until an eviction becomes the only alternative. However, we are here to handle things if the tenant becomes a problem. There is just no way of knowing what human behavior will take place in the future.
There are many different scenarios of what can happen. The tenant could give or be given a thirty-day notice and leave without paying the last month’s rent and leave damages. They could simply “skip out” on the property. Although, this may be upsetting, this can sometimes be a positive action because we can move on to put in a better tenant. Then, of course, there could be an eviction or unlawful detainer action involving an attorney.
What investors should avoid is retaliation or refusal to do necessary maintenance. These situations have produced some of the biggest court settlements concerning tenancy and many are in the millions against the property owner. You do not want to give a tenant a notice to move because he is asking for repairs. You do not want to ignore the report of mold, other toxic substance, or allow something that a court could perceive as endangering the life of the residents.
If a tenant becomes a problem, allow us to take action if we recommend it. It is better to face the situation than have it become worse. The longer you prolong removing a difficult or non-paying tenant, hoping to avoid attorney fees and obtain some rent, the bigger the risk that you will incur much higher losses. We will do our best to prevent any problem tenancies, but people are not always predictable. What is important is to allow us to remove the “lemons,” so we can make lemonade by replacing them with better tenancy for a healthier investment.
