Owning a rental property offers several benefits and can be a rewarding experience, but there are some pitfalls that inevitably come with the territory. Most tenants won’t cause significant problems—usually, they will pay on time, they’ll get along with the neighbors, and they won’t destroy your property. However, there are always exceptions.
Problem tenants not only cost you money, time, and stress in the form of late rent payments, noise complaints, and property damage—they can also affect how neighbors view you as a landlord and even ensnare you in legal trouble. Read on to learn more about how to effectively deal with problem tenants.
One of the easiest ways to avoid problem tenants in the first place is by setting boundaries. Though there is no way to control someone else’s behavior, you can set the tone by making your expectations known upfront. This begins during the pre-screening process. There are limits to how much information you can obtain from a prospective tenant’s former landlord, but be sure to let the prospective tenant know what rules you have established for the property and for rent collection.
Set the tone early as you screen prospective tenants by stating your policy on late payments, noise complaints, and reporting incidents at the property. Once the rules are clear, people have the opportunity to walk away—which they may do if you make it clear you will not tolerate rule-breakers. You may also wish to pass on a prospective tenant based on their reaction to your rules. Of course, you should also include these rules in the text of the lease once you have selected a tenant.
Develop a Rapport
Laying down ground rules may seem cold and impersonal, but it’s key to establishing mutual respect between you and prospective tenants. Communication is the most important part of any relationship, and the landlord-tenant relationship is no different.
When you don’t know someone, it can be difficult to discuss problems and there will be a natural tendency to avoid the issue entirely. When you create a rapport with tenants, it makes it easier to deal with any issues that come up down the line. Initially, there may be apprehension on both ends. The tenant may not feel comfortable coming to you and vice versa. For your part, make sure to provide contact information to the tenant—your own and an emergency maintenance contact, if someone else will be handling this. Let tenants know when they can expect a response as well. Be open to responding promptly to emails and phone calls, and show a willingness to solve problems collaboratively.
As a businessperson and property owner, you should already understand the importance of thorough documentation. This is especially helpful when dealing with problem tenants. If a disagreement comes up, writing it down is important from a legal standpoint because it will be critical for protecting your liability.
The first documentation between you and the tenant is the lease. This is where you reiterate the ground rules that you’ve established verbally. When these rules are in writing and signed by both parties, there is little room for misinterpretation. Be sure that the tenant is clear about the potential legal consequences should they break the rules in the lease, but also be willing to work with them before it goes too far. Legal battles can be costly for both parties. If a tenant breaks a rule, rather than confronting them on the phone or showing up unannounced, issue a written notice to comply within a certain time frame. This creates a paper trail and avoids a potentially nasty, emotional confrontation.
Even smaller interactions with tenants should be documented. If you have discussed a late rent payment with them verbally, follow up with an email or even text message summarizing the conversation. If you manage multiple properties, you may even consider subcontracting this out to a customer relationship management (CRM) firm that can organize and document your contact with each tenant.
Don’t Manage Your Property Alone
Although you may have envisioned taking a hands-on approach, managing your own properties can become difficult, especially if you have multiple problem tenants. If you combine a high volume of tenants with a few difficult personalities, it’s almost unavoidable to become overwhelmed. Enlisting the help of a property management company can remove some of this stress.
Property management companies handle everything from collecting rent payments to scheduling maintenance to dealing with troublesome tenants. Of course, there is a cost involved, but the amount of time and stress you save can be priceless.
Even when you implement the tips given here, you may find you have a problem tenant that you just can’t work with. Sometimes, despite your best efforts, you will need to start legal proceedings to get the tenant to leave your property. Always be sure to follow all applicable laws when it comes to your conduct as well as the process for legally removing a tenant. Avoid emotional or vindictive behavior, as it is often viewed negatively in court and could lead to a decision in the tenant’s favor. Hopefully, you will never have a difficult tenant, but if you do, following these tips can help you prevent smaller issues from becoming major problems.