Landlords.....what headaches come with having C- and D tenants?
Rental Property Investor · New York City · Member since 2019 · 90 posts · 122 votes
Landlords.....what headaches come with having C- and D tenants?
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Investor · Brooklyn, NY · Member since 2018 · 20 posts · 95 votes
6yI’ll break down my solutions to @Philip Williams great list of issues.
1. To get rent paid on time, I use Cozy and let them know rent will be paid through direct deposit when they’re viewing the house. Anyone with plans of not paying won’t want their rent automatically deducted from their account. They also won’t like that their Cozy payments impact their credit score. I also have a Sec 8 tenant so getting the rent is never a problem.
2. If you have a nice home, people won’t want to leave it. Do the work renovating the space before and you’ll have a “one in a million” property with grateful tenants and super low turnover. Also, do the math to see if it’s worth raising the rent every year and risking the tenants leaving. I have good ones and don’t plan on raising their rent for the first 4 years they’re with me.
3. Don’t ever bend your standards in the screening process. I haven’t ever had to, but I’d rather give up a month of rent to look longer than lower my standards. I ask for 3 months pay stubs, last three bank statements, copy of photo ID, and contact info for their employer and past two landlords. I do a background check but not a credit check. Poor credit is assumed. I don’t even run it since that would bring it down even lower. If they tell me it’s very low and they don’t have much in reserves but they do have a good income, I’ll have them pay first, last, and security upfront. The last month gets paid in monthly installments and added to their rent payments.
4. Like I said, credit isn’t a big deal to me. Just use the last months rent installment payments to protect yourself.
5. No reserves is always an issue. It surprises me every time tbh but it’s the nature of the environment. You can use the strategy above and make sure your reserves are strong. If they have low credit and no reserves, I’d only rent to them if there are two or more working adults in the home. Or if they have Sec 8.
6. C and D doesn’t mean the neighborhood is dangerous. Check the crime report. My rental is in a town right next door to Newark, NJ (very high crime rate) but my area is extremely safe. With that being said, I still have video cameras and motion sensor lights on every door. It’s more to make my tenants feel safe than anything.
7. I choose not to increase rent but I definitely could. And my house has gone up in value about $25k a year since I bought it. You can’t buy in just any lower grade neighborhood. I looked for one within 30 mins of Manhattan with lots of access to public transportation. Mine was one of 3 houses being renovated on the street, and there are three schools within walking distance. Make sure the home you get is near something noteworthy and you should be okay.
There’s a lot of money to be made in lower grade neighborhoods. I also think it’s important for *US* to own in communities of color, which are often (but not always) C and D areas. Good luck to you!
81 Replies
- Jersey City, NJ · Member since 2016 · 26 posts · 22 votes6y
Most times allowing small violations of the lease, leads to bigger violations. We set clear rules and respectfully address any violations, for example, putting garbage in the trash cans, not on the ground near them. We have found this impresses upon tenants that we are going to enforce the rules. Like children, If we only talk punishment, but never do it, they know they can get away with violating the rules. Likewise, some tenants need clear guidelines and consequences for violating them.
- San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes6y
Originally posted by @Anthony Jeffers:
Most times allowing small violations of the lease, leads to bigger violations. We set clear rules and respectfully address any violations, for example, putting garbage in the trash cans, not on the ground near them. We have found this impresses upon tenants that we are going to enforce the rules. Like children, If we only talk punishment, but never do it, they know they can get away with violating the rules. Likewise, some tenants need clear guidelines and consequences for violating them.
This is absolutely true. I would look the other way with lovers if there weren't problems, because I learned that if I put them in the position to have to add the lover to the lease, when they broke up (which usually ended up happening), in order to terminate the situation, they would then both have to vacate the property. Whereas, if I really liked the original tenant and wanted them to be able to stay, if I just left things alone until/if/when there was a problem, the original tenant could stay and just kick out the lover. It was a way of keeping good tenants for me.
Different types of properties can need different finessing. I had a lot of younger tenants who lived in small studios, mainly. If I was managing SFHs, I may have done things differently.
- Member since 2020 · 18 posts · 8 votes6y
@Ladè Baruwa
Having C or D results.
Ways to avoid is to make a mark in the neighborhood. Fix and edit stuff. You are the landlord and you create the environment who fills in the next stop creating B and A Standards
- Realtor · Portland, OR · Member since 2020 · 87 posts · 43 votes6y
@Philip Williams Facts.
- 6yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
This says it all:
Here are our April rent numbers for Metro Detroit:
Mostly white-collar tenants (A & B areas): 100% paid
Mostly blue-collar tenants (A, B & C areas): 78% fully paid, 4% partial paid, 18% nothing paid
Mostly no-collar tenants (C areas): 60% fully paid, 13% partial paid, 26% nothing paid
We've tried and failed at managing in D areas and now avoid them. It's not worth the effort unless you live in the area and can drive by them daily.
Logical Property Management4.9465 Reviews - Real Estate Consultant · Houston, TX · Member since 2020 · 206 posts · 944 votes6y
The headaches are:
1. Your tenant doesn’t pay and you have to evict.
2. Your tenant does meth and destroys the house.
3. Your tenant goes in and wrecks the house, steals everything out of it and sells it, and then squats in the home until you evict him.
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