No good deed goes unpunished

[Rick Bassett]

We had a prospective tenant show interest in one of our rental homes a few years ago. While their credit history wasn't great, they qualified on income plus the husband's veterans housing allowance. 

They owned a house in a nearby town but wanted to move to our town as the school system was much better and our house was bigger. They asked if we would be interested in managing the rental on their old house. 

It seemed like a win all the way around as we knew we would be guaranteed our rent and we would get a chance to stick our toe into the property management for others for the first time, so we agreed.

Fast forward about 1.5 years.....it turns out that our tenants (owners of 2nd house) weren't paying their mortgage, taxes...etc despite us collecting rents for them. While 'rent skimming' isn't a crime in our State; the tenants of the 2nd house were not pleased when this came to their attention even though they continued to receive the benefit of a nice rental for an affordable price each month.

We communicated with everyone on their rights and obligations but being a 3rd party in the middle we had no real leverage to force the owners to make their payments or force the tenants of the 2nd house to make their rent payments. So eventually it fell apart as everyone felt cheated.

So as I reflect on 'lessons learned' I only entered into this situation to help our tenant move into one of our properties. In hindsight the right thing to do probably would've been to pass on them. 

I gained some (ugly) experience in 3rd party property management that helped me realize that some owners are just going to take the rent money and not meet their obligations with little regard for the reputations of the people that they are dealing with. I guess this is one of the big risks of managing properties for others.

Rick