Help!!!! First property disaster

[Eric Salgado]

Hello BP,

I got a long a brutal history on my first property with lots of learning mistakes. I’ll try to keep this as short as I can but also paint the exact picture that I am in and desperately need some advice. So bought my first out of state property in Indiana last May it’s a Duplex. Top unit on Christmas had a suicide and the unit downstairs was very close with upstairs tenant. The bottom unit had always paid rent on time and never made as much as a peep until the girlfriend downstairs was so emotionally destroyed about the suicide she left the property. Now the boyfriend of the bottom unit has been nothing but trouble. We decided to switch property management companies as we found out they weren’t doing everything we were paying them to do including doing a background check on the bottom units boyfriend. The downstairs tenant first had a fighting ring in the backyard that after an eviction notice he did take down. Next, we have to chase him down to pay rent and typically only does after we serve him with a 10 day notice. Then He plays very loud music, won’t let anyone in his unit including the water department cause our water bill and electric bills have skyrocketed, when the contractor goes upstairs to fix the upstairs unit he lets everyone know there was a suicide in the unit which we feel will scare away another tenant when we are trying to get it filled. He appears to be strung out on drugs and actually creeped out a contractor so bad he left the job site. Lastly he has his new girlfriend living there and Paid the last months rent with her name on the money order. So my question is how do we get this tenant out keeping in mind the following. His lease is up next February, he does pay but only after we serve him a 10 day notice and COVID.I am open to any suggestions because any decent tenant we get upstairs is going to want to leave when meeting this downstairs tenant.  My property manager thinks we have somewhat of a leg to stand on with the unauthorized guest but the previous property manager lease was in her opinion didn’t specifically define the subletting and unauthorized guests. I have another property and it’s section 8 in another state and it’s been incredible but this property being my first has been a headache to say the least. Any suggestions, Cash for Keys? Eviction for unauthorized user, not allowing access to unit? Thanks in advance. 

  

[Nathan Gesner]

First and foremost, your Property Manager should be handling this. The fact that they haven't is a clear indication that you need a new one. I'll share some recommendations at the bottom of this post.

Second, you are in over your head. Document everything and take it to an attorney immediately. Do what needs to be done, pay what needs to be paid, and get them out of your unit. It sucks, but you probably should leave the top unit vacant until he's gone because he'll only continue scaring away decent tenants. Empty the property, clean it up, start fresh with a competent property manager that handles these issues so you don't have to.

Remember: cheaper doesn't mean you'll make more money.

You can start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. Regardless of how you find them, try to interview at least three managers

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!

4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?

This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!