How dirty will you let your Tenant be?

[Nathan Gesner]

We all have different cleaning standards, but some people are just filthy! 

Below are images from an actual apartment that's been occupied by the same tenant for almost 30 years. He pays 15% below market rate but has never been late once. The yellow glow is from cigarettes, not my lack of white balance. The last picture shows how even the items stored next to his bed are covered in thick dust.

Would you allow him to stay? Would you force him to clean it up? Would you kick him out and renovate?

[Jill F.]

I'd tell him he has to pay a company to clean and if he refused,
especially If the rent could be pushed up more than 15%, (maybe 25-30%) with a nice reno, I'd kick him out and reno.

[Jonathan R McLaughlin]

Aging or mental health issues? Evenness of the wear seems evidence of growing inability to self care?

[Mary K.]

@Nathan Gesner Could you easily find another tenant that will be clean, pay on time, and stay for 30 years? If that would be difficult, I would say raise the rent a little at a time and let him stay. Either way, you are going to have to renovate the whole place when he leaves, doesn't makes sense to start that earlier than necessary. 

I bet he does not report leaks/issues when they come up. That would be a bigger concern to me personally.

[Nathan Gesner]

@James Wise @Joe Splitrock @Mike Dymski @Jim K. @Ned Carey @Russell Brazil @Alexander Felice 

[Nathan Gesner]

Originally posted by @Mary K.:

@Nathan Gesner Could you easily find another tenant that will be clean, pay on time, and stay for 30 years? If that would be difficult, I would say raise the rent a little at a time and let him stay. Either way, you are going to have to renovate the whole place when he leaves, doesn't makes sense to start that earlier than necessary. 

I bet he does not report leaks/issues when they come up. That would be a bigger concern to me personally.

Mary, that is an excellent point that most would not consider. Tenants that live like this have a tendency to allow maintenance to go unreported, which could cause severe structural damage that costs much more than the benefit of having stable tenancy.

But in this particular case...he does report maintenance and there are no problems with the apartment despite 30 years of living like this.

[Alexander Felice]

This is cleaner than my apartment!!!!

honestly it's gross but mostly cosmetic, you've saved a lot more by letting him live in the filth than turning over filthy apartments.  This is a 30 year tenant that has saved you some serious expenses. You would have had to turn that place over 5-6 times by now otherwise, and when he finally leaves all you really need to do is clean out and a lipstick rehab. For me this would be a $5k cost, I'll gladly take that for a 3 decade reliable tenant. 

I would be more scared if he was a hoarder, which is dangerous, this guy just seems grimy. 

[Ronan Donnelly]

@Nathan Gesner, create a win-win for yourself by raising the rent, if he pays you win and if he doesn’t you get to renovate a severely neglected unit and get market rent.

[James Wise]

Originally posted by @Nathan Gesner:

@James Wise @Joe Splitrock @Mike Dymski @Jim K. @Ned Carey @Russell Brazil @Alexander Felice 

 When the apartment looks like what you've posted there is no reason for an investor to remove an income stream in an effort to empty their wallet. The cost for you to renovate it when that tenant naturally turns is going to be the same or similar to what it would be right now. So for all of the investors out there who immediately jump in and say "I'd make him clean it or I'd kick him out" I ask you why? Have you actually stopped and thought about it logically with the bottom line in mind or are you simply having an emotional knee jerk reaction to something that displeases you? If you as a landlord thing you have the ability to change the lifestyle habits of your tenants, you've got a whole lot of hurt coming your way.

[Nathan Gesner]

To piggyback on @James Wise, if this unit rented for $100 below market, it would lose $1,200 a year. It would take five years of loss to match the amount required to renovate the unit. But I would probably have a couple months worth of vacancy during that five years, plus utility costs, plus the risk of getting a bad tenant...

When you consider the true cost of turning the unit over and the risks associated with removing a stable tenant, it may not be worth the effort. 

This is a true story. I bought the property in 2018 and this tenant came with it. He was below market so I bumped him up to 10% below market, which he readily agreed to. I will continue to bump him up each year until he's at market but I'm honestly happy with him right now. Out of six apartments on this property, he's the only Tenant still there. One unit was empty, one knew me and opted to leave because he knew I would evict him, one died, and the remaining two were evicted. So Mr. Clean is my only stability!

[Jim K.]

@Nathan Gesner

It's nice to know we're all on the same page. The one problem you really have to worry about in my area that's associated with cleanliness is vermin. If you look at this guy's kitchen, while it's nasty in terms of filth, he doesn't have wasted perishable food just strewn around. What I call "pizza box syndrome," where they'll eat most of a delivery pizza and forget the rest to rot in the box in a bedroom corner. The tenants who do that end up with rats. Rats end up gnawing on the insulation of older homes.

In this property class, it's vacancy and turnover that will kill you. Long-term tenants who consistently pay have a lot more value than others. Now granted, CLEAN long-term tenants are better than filthy long-term tenants, but that's usually not how the cookie crumbles.

[Andrew B.]

My concern would be that this could attract pests. If it was a multi-unit situation I would have gotten rid of him long ago and cleaned it up.

[Franklin Romine]

That’s a loyal tenant.  I would allow that tenant to stay until they died.  Probably increase rent 5% per year.

[Andres A.]

If he has stayed there for 30 years and has always paid for rent on time, I could care less if he wants to live in those conditions 

[Shain Ismailovski]

A tricky position for sure. The value of a good tenant is sometimes worth putting up with certain, lets call them "quirks", but those conditions are pretty tough. You will eventually need to deal with that mess either when the tenant leaves or passes on. I would present him with the option of you getting a professional cleaning company to come in and scrub the place down which you would cover, but the trade off would be you would need to raise rent to full market value going forward. If they don't go for it, fair enough but I would then offer a plan in which rent would be raised yearly. This will need to be dealt with eventually and having as much in your pocket to deal with it before it happens will help. I would not move to get rid of the tenant however, since they are non-problematic aside from this. 

[Nathan Gesner]

Originally posted by @Jim K.:

@Nathan Gesner

It's nice to know we're all on the same page. The one problem you really have to worry about in my area that's associated with cleanliness is vermin. If you look at this guy's kitchen, while it's nasty in terms of filth, he doesn't have wasted perishable food just strewn around. What I call "pizza box syndrome," where they'll eat most of a delivery pizza and forget the rest to rot in the box in a bedroom corner. The tenants who do that end up with rats. Rats end up gnawing on the insulation of older homes.

In this property class, it's vacancy and turnover that will kill you. Long-term tenants who consistently pay have a lot more value than others. Now granted, CLEAN long-term tenants are better than filthy long-term tenants, but that's usually not how the cookie crumbles.

Jim, I've had tenants that lived much "cleaner" than this but still left food out in a manner that attracted pests. That would be a problem worthy of coming down on the tenant and possibly removing them.

This guy smokes like a chimney and doesn't dust. But he doesn't leave food out and there's no signs of even sugar ants. As long as that's the case, I'll put up with him.

By the way, his smoking was a concern to me because he literally lays on his bed watching TV all day. But there's not a single burn mark anywhere. I see no indication he's unsafe about it so I let it go. I had a different tenant several years ago that had burn marks ranging in size from a dime to a dinner plate!

[Bjorn Ahlblad]

@Nathan Gesnernot much upside in cleaning the unit or not renewing the renter at this point. 15% under market is not that bad for that place-look at where he lives-Nathan how could you! ;)) Looks like a service station bathroom along hwy 18!

[James Wise]

Originally posted by @Nathan Gesner:

To piggyback on @James Wise, if this unit rented for $100 below market, it would lose $1,200 a year. It would take five years of loss to match the amount required to renovate the unit. But I would probably have a couple months worth of vacancy during that five years, plus utility costs, plus the risk of getting a bad tenant...

When you consider the true cost of turning the unit over and the risks associated with removing a stable tenant, it may not be worth the effort. 

This is a true story. I bought the property in 2018 and this tenant came with it. He was below market so I bumped him up to 10% below market, which he readily agreed to. I will continue to bump him up each year until he's at market but I'm honestly happy with him right now. Out of six apartments on this property, he's the only Tenant still there. One unit was empty, one knew me and opted to leave because he knew I would evict him, one died, and the remaining two were evicted. So Mr. Clean is my only stability!

 Would I eat dinner there? Hell no. Will I take his money? Hell yes.

[Jim K.]

Originally posted by @Nathan Gesner:

Originally posted by @Jim K.:

@Nathan Gesner

Jim, I've had tenants that lived much "cleaner" than this but still left food out in a manner that attracted pests. That would be a problem worthy of coming down on the tenant and possibly removing them.

This guy smokes like a chimney and doesn't dust. But he doesn't leave food out and there's no signs of even sugar ants. As long as that's the case, I'll put up with him.

By the way, his smoking was a concern to me because he literally lays on his bed watching TV all day. But there's not a single burn mark anywhere. I see no indication he's unsafe about it so I let it go. I had a different tenant several years ago that had burn marks ranging in size from a dime to a dinner plate!

"Don't smoke in bed or the ashes you find may be your own." I took that to heart when I smoked. I had this one girlfriend when I was young and didn't know better, on the other hand...but there was no way to get any sense into that one. Talking to a wall of stubborn stupid all day long. And then I quit, thankfully.

It's weird with the food, isn't it? This guy's sixteen kinds of slob, but no food. Because I've had those, too, the ones that do have a cleaning schedule but can't put food away properly. Generally, I find that's the middle-class group here, never had to work in food service as teenagers, never learned about food safety. We get them once in a while, but not often in our property class.

[Account Closed]

I had one of these.. Inherited tenant was a 30 year tenant that lived with her caretaker. She unfortunately passed and I made a deal with her caretaker to stay in the unit. It would cost me 10k+ to turn the unit but makes no economic sense. The caretaker has been a fine tenant and agreed to take the unit as is (Care taker has been living there for the past 5+ years). 

Keep him. 

[Nathan Gesner]

Exactly. Look at the bottom-right picture. There is a bag on the left side that is stuffed with other bags. Those are potato chip bags. He fully opens the bag, cleans them out, then stuffs them inside the previous one. I have a different picture where he has about 40 potato chip bags, one stuffed inside the other. Very strange!

[JD Martin]

Most likely I wouldn't have bought the property with anyone in it so I wouldn't have to make that decision. 

HOWEVER, if I did buy it in that condition, as long as there wasn't any food around, I wouldn't do a thing until he died or left. Vacancy is a cash killer. Unless I had plans to heavy renovate the place to get much higher rents and attract a better class of tenants. That's not always possible depending on location or market. 

As for my own places, with tenants I've placed, I draw a line between sloppy and dirty. Dirty is grime and filth all over everything. I overlook sloppy, but dirty makes it hard to know what kind of damage is being done to the unit and I draw the line there. I don't want rodents or other pests and I want to be able to do reasonable inspections. But all of my units are rehabbed before they first went back on the market. 

[John Teachout]

This is going to be an expensive turnover. I've renovated properties that looked like this with the smoke stains outlining where everything hanging on the wall was. White walls the color of oak cabinets, etc. Took two washings with TSP solution, Kilz oil base primer and then two topcoats. ALL FLOORING had to be replaced, even cabinets retain smoke smell and are hard to get the smell out. We spent five months but it was beautiful when completed and rented at the higher end of market.

That said, the turnover cost is probably going to be the same now as it would have been 5 years ago or 5 years into the future. I'd rent under market just to kick the can down the road. The person isn't going to change their lifestyle so they either go or stay but don't expect any changes.

We have one property that is occupied by a cat lady. (no pets allowed got overlooked). This property is going to need a major rehab and she's $200 under market but it still cash flows well so we leave her in it for the same reasons listed above.

[Rochelle Thea Fabrizio]

@Nathan Gesner Well that's gross but you aren't living in it. I would keep him. He clearly has low standards of cleanliness but if he reports maintenance as you say and is on time with rent with no breach of lease, keep him in there as long as you can with him providing stability. I would just recommend a face mask if you have asthma when entering! Best of Luck!

[Anthony Wick]

@Nathan G.

Yikes! I guess you’d have to ask yourself how much money you feel like spending to turn the property. There is absolutely no chance of the tenant “cleaning” the place. That’s at least a $5,000 turnover. And that’s if you do a lot of work yourself.

If the entire property is like this, might as well let it ride until you’re ready for major renovations.

[Khalid Bryan]

@Nathan G. I might not renew that lease. The issue is, how do you screen for cleanliness? I guess you could call their last landlord for a review.