Landlording Lessons Learned From My Last Tenant Nightmare

A few months back, the first tenant I had in the first house I bought post bankruptcy moved out. He had been with me for over 3 years and had always paid his rent on time. I purchased the house in the $25-30k range, put some money into it, and it has been a great earner at $800 monthly since he moved in.

I had fired the management company who I was supposedly overseeing it while I had lived out of state and had a stop gap new management company in place to help me transition as I moved back to the area. I knew from what the new management people had said there might be some “work needed.”

Well. There sure was.

My Horror Story

Let me tell you first, I’ve decided to start managing all my own properties. I do a better job. I select my tenants the way I want them. We look eye to eye. I point out everything in the place that I want to be kept a certain way. We have very nice properties, and we get so much traffic on our properties that we often lease them out within hours/days of listing.

We have an understanding, as landlord and tenant.

So, to say this tenant moving out and I were NOT on the same page regarding upkeep or how to leave a rental unit when you vacate would be an understatement.

The place was a wreck. The carpet was destroyed. DOG SMELL. Holy crap. There was a dead mouse that had been cooking there for a while near the hot water heater. Dirt everything. Cobwebs. And more dirt. And paint missing from doors. And holes in the walls. I honestly don’t know if they ever cleaned. One time. In three plus years.

#seriously

I could go on and on with the specifics, but there are other things here that I want to mention when you are thinking about your management company or you are managing yourself.

What are the most costly items in a property? Probably the roof, HVAC, foundation, maybe hardwood floors or a really nice kitchen with granite and upscale cabinets. This was no JW Marriott, but it was a nice rental house when they started with it.

The vents, every single one of them, had dirt literally clogged and jammed in every nook, in the vent cover, in the side of the side, in the top, the bottom… everywhere.

The gutters were packed FULL of debris, which had also resulted in some soaked sheetrock and two outside walls. Repairing and replacing sheetrock, trim, and carpet isn’t cool.

The HVAC is only a few years old, and it has been abused during this time. It will need to be cleaned and serviced.

They even managed to completely destroy the countertop in the kitchen. Destroy it. The cabinets were so dirty, we ended up completely tearing one section out, and I spent several hours scraping and cleaning the other sections.

These are all things I do now within my properties, but this property and one other had been with my management company before I started growing my business and taking them over as we bought new properties.

What to Do as an Owner

1. Don’t assume the management company is taking care of business. Make sure you are checking with them on a regular basis and finding out about how your properties are doing. And absolutely find out when they have been around to check on them.

2. Be prepared to spend some money on worthwhile things like HVAC maintenance and cleaning the gutters. These small costs turn into big problems down the road if they aren’t addressed. Especially if you don’t know they aren’t being maintained properly.

3. Make sure you are very up front with the tenants if you are speaking with them and with the management if you aren’t in direct contact. Let them know specifics about how you want your property cared for and maintained. Write it down. Have an every 3-4 month check-in in the units for “battery check of smoke detectors” and a furnace filter. Above all, make sure you know what is going on inside of your property. You don’t have to be nosey, but it’s your right to know they are caring for the property.

4. Don’t be afraid to get a little dirty. Checking on the yard or gutters? Maybe you can go. Or do the walk through as the silent partner with the rental manager. If you are a turnkey owner, make sure you are still in communication with the management company and get not only the paper copy updates, but have a conversation once in a while keeping them aware you are still keep tabs even from afar.

New Policies in Place

As a manager of my own properties now, we are very clear with our tenants at the beginning. We expect it to be neat and tidy, other than the usual wear of a home. We walk through the house together. And we have an open line of communication. We do a 3-4 month check up IN the home, for smoke detector batteries (and of course, seeing the entire house while there).

Managing properties requires you to be on top of what is going on, and I prefer to be ahead of these issues as much as possible. That’s why we replace plumbing fixtures, outlets, plugs, and water and sewer lines. We try to mitigate any issues we might have on the front end to save us on the back end. It’s that simple.

Do you want to deal with it today, or do you want to deal with it when you have an occupied house, an unhappy tenant and an owner wondering why they are paying for something else to fix?

What do you do in your property management business or rental business that saves you/your investors time and money? New faucets? Fixtures? A walk through sheet for at least signing and end of lease?

Let me know with your comments!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.