How to Deal with Problem Tenants – Part 1

It is a new landlord’s worst nightmare – the tenant from hell. You thought your screening process would have pinpointed problem tenants, but here they are calling you every minute or worse yet the neighbors are calling every minute. It happens to the best of us. Sometimes even the most careful screening fails to reveal a tenant’s true nature. Here are a few easy ways to deal with difficult tenants and their top complaints.

The first and perhaps the most important is to control your emotions. They are borrowing your property, your investment and it is only natural that you want to protect it. But if you fly off the handle, threaten, curse or get physical, it is only going to make matters worse. If you want the fire to die down, don’t add any wood.

Now that we got that out of the way, here are top 5 problems caused by tenants and what you can do to fix it. We will go over the first two this week and finish up with the final three next week.

Problem #1: They Are Always Late with the Rent

Time is money and the last thing you want to find yourself doing is spending your time chasing down money that rightly belongs to you.

The Prevention: Make sure your tenants can afford the rent. They need to earn at least three times what the rent and utilities will cost them each month. If they do not qualify, it is better to wait until you find someone who does than end up with a squatter that plays the system.

The Carrot: Reward timely payments. Rather than charging a late penalty (If they aren’t paying the rent on time, how will you get the penalty out of them?), consider give a discount for early payment. Say the market rent for the unit is $850 per month and due on the 5th. You charge $875, but if they pay their rent before the 5th they get $25 off each month. You get market rent and they are motivated to pay early.

The Cure: Late rent payments are a valid reason for eviction – if it is clearly spelled out in the lease agreement. To make sure they understand this, make them initial next to that paragraph. Additionally, do not allow your tenants to get behind on their rent. If you give them a 5 day grace period and they haven’t paid by then, issue the legal eviction notice. It will prove to the tenants you mean business and it will prevent you losing more than the security deposit.

Problem #2: They Disturb the Neighbors

Do not let a bad tenant drive away your good tenants by their bad behavior. This can be a touchy situation but one that cannot be ignored.

The Prevention: Clearly state what activities are acceptable and what are not within the lease agreement. Use the local noise ordinance as a guide.

The Cure: If the neighbors keep calling you, do not be afraid to call the cops and have them handle the disturbance. Send your tenants a kind but frank letter stating that they are in violation of the lease and that they are in jeopardy of an eviction.

Are you starting to see a pattern? Many problems that are caused by tenants can be quickly dealt with by having a clearly defined lease agreement that states what is expected and the repercussions if it is not followed. Once the tenant understands your rules, so to speak, they will be in a better position to follow them.

Make sure you stop back next week to see how to deal with three other types of problem tenants.