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Tenants from Hell: Five Tips for Managing Terrible Tenants

Frustrated with your terrible tenants? Here are five tips to help landlords avoid nightmare scenarios from our friends at BiggerPockets.

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Every landlord eventually gets them.

If you are a landlord and haven’t faced them yet – don’t worry, you will. I’m talking about the tenants from hell. The tenant who pays rent late, argues with everything you say, damages the property, lets their children turn your walls into a work of modern art, and lies like they get paid to do so. Perhaps you are not even a landlord yet – but with a decreasing inventory and rising prices, many are finding now is a great time to get into the world of investing in real estate.

As a landlord for the past six years, I’ve had my fair share of tenants from hell. They aren’t fun. I could tell you countless stories of tenants who lie, cheat, steal, and create disastrous messes that I wouldn’t expect an animal to make. However, each year I find less and less of these tenants within my little kingdom. It’s not because the tenants in my area are improving and it’s not because I’m covering the homes in delicious bacon to attract only the best tenants. The difference is in how I deal with the problem. This post is going to share five tips I have used in minimizing my dealings with the tenants from hell.

Tip 1: Don’t Scream, Screen

The first step in dealing with tenants from hell is simple and obvious: don’t admit them. When renting to anyone, be sure to do a proper screening. A good screening includes:

  • Running a background check
  • Running a credit check
  • Calling their references
  • Calling ALL previous landlords
  • Driving by their current residence – maybe even inviting yourself in
  • Verifying their income

Additionally, most tenants do not know what amount they can afford. Begin by requiring that their verifiable income must be at least three times the monthly rent. This is a standard used by many investors to qualify a tenant and for me – it’s non-negotiable. Don’t be affraid of saying “no” and waiting for the perfect tenant.

Tip 2: Have a Written Policy

It’s difficult to know how to follow the rules when there are no rules to follow. The lease is your first step in creating a written policy, but you can also create a list of “dos and don’ts” to give to your tenant when they move in.

If rent is due on the 1st – then have that in writing and have the tenant sign a lease that says so. Don’t be a “handshake” landlord and show the tenant that this is just a hobby for you. You wouldn’t expect a lawyer to draft up a legal document without paperwork or a car dealer to sell you a new Prius without your name on the dotted line – so the same should be said for the relationship between you and your tenant. Start things off on the right foot: get it all in writing and show that you are a professional.

Tip 3: Be Strict and Carry a Big Stick

Most of the “horror stories” involving tenants were, I’m sorry to say, the landlord’s fault. No, the landlord wasn’t the one “doing the deed,” but usually it was the landlord’s flexibility that gave the tenant the permission to do wrong. For example, by not charging a late fee, the landlord is giving permission to the tenant to pay whenever.

While it might sound mean, being as strict as possible will ensure that the rules are followed and actually create a better relationship between you and your tenant. It comes down to the question, Is it better to be feared or loved? In the case of landlording: it is better to be feared.

Having punishments in place (monetarily speaking) will ensure the tenants follow those rules. I require that rent is paid on the first, but I offer a 5 day grace period. On day six – if no rent is received, we issue a three-day “pay or vacate” notice taped to their door, along with a hefty late fee and “notice serving fee.” I do not let tenants get behind on rent – and you know what? They never do.

Tip 4: Don’t Be the Landlord

If you are a non-confrontational person like me, the best tip is to simply “not be the landlord.” No, I’m not suggesting that you hire a property manager to take care of your rental (though, for many this is the best answer.) Instead, I believe it is important to separate yourself from being the owner and just be the “property manager” to the tenant.

This way, you can always need to “ask the owner first” and get back to the tenant, giving you time to think about tough (or not so tough) questions they might ask. The bad guy becomes this elusive and mysterious “owner,” and you become simply the “middle man.”

I know some of you reading this are thinking “but that’s dishonest!” Trust me – it’s not. If you are holding property in your own name (instead of a legal entity) you are are just setting yourself up for legal problems. Go speak to your lawyer, form a legal entity to own the house, and then simply manage that entity. Two birds, one stone.

Tip 5: Don’t be Afraid to Remove the Problem

Life is too short to be stuck renting to tenants from hell. If you are having problems with your tenants after following the rules above – get rid of them. There are plenty of places they can go, so it’s not like you are kicking them out on the street. If they have a lease and you don’t want to evict – you can always try a technique known as “Cash for Keys” where you actually offer the tenant money to leave (while I know the gut reaction to this is shock – trust me, sometimes it’s the best thing for the wallet and the headaches that an eviction could cost.)

In the case where an eviction is necessary – come down hard and come down fast. Hire a qualified lawyer to swiftly evict the tenant and move on. As I said, life is too short to deal with tenants from hell.

Have you had any tenants from hell? What tricks have you used to deal with them? Leave your answers in the comments below and let’s talk about it.

About the author: Brandon Turner is the Senior Editor & Community Manager of BiggerPockets.com, the premier real estate investing social network, as well as an active real estate investor and author of How to Rent Your House, a #1 best selling Kindle book.

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posted on: January 18, 2013
11,677 views, 10 comments

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10 Comments

  1. Steve

    When we bought a triplex in late 2009, we inherited tenants from hell. On the surface, they looked like your perfect yuppie couple with two very young children. They also had a live-in baby-sitter who lived in the semi-finished basement. When we told them we were finishing the basement for ourselves and the baby-sitter would have to go elsewhere (there was no provisions in their lease to allow them to use the basement), they stopped paying rent and electric bills. At $1500/mo rent and $125/mo electricity, that adds up fast. An expense we had no means to cover.

    In Ontario, tenants are kings. The laws are so heavily tipped in favour of tenants, it’s a miracle there are any small landlords like us left. It cost us $4500 in legal fees plus their $5000 in unpaid rent and utilities before they were gone. We did get our judgment, but it hasn’t been worth the paper it’s written on. So we put it into the hands of a collection agency, but these scumbag tenants were so smooth using smoke and mirrors with lending institutions and others that we’ve yet to collect, despite the fact that the house they bought after leaving here has been sold by the bank for non-payment of mortgage.

    They go by numerous aliases and we still get mail here from lawyers, collection agencies and utilities seeking their respective payments.

    I shudder to think what values these people are instilling in those two innocent children. They will grow up to be just like them: thieves in nice clothes.

    • THOMAS in response to Steve

      THere was a section 8 tenant living in the apartment above me who had teenage children who behaved worse than wild animals. I could be all day, so to make a long story short the property went from looking like a palace to a run down project. The landlord unfortunately was only concerned about an easy payment. He is regreting it now because he see that they are costing him thousands in repairs. By the time they move out repairs are going to at least be over $5000.

      Message to all landlords: If you think government assistance programs are the answer think again. Too bad a few bad apples spoil a bunch.

  2. John

    I have been both a landlord and a tenant. I am now a process server who serves both. Trust me, there are just as many landlords from hell as there are tenants. I had one landlord who lost $900 rent and tried to evict me. I had to sue in Small Claims where I found that the son of the owner embezzled my rent money.

  3. Darnella

    Going through same issues of lying tenant just been there for several months caused fine on my home.

  4. gg

    Non-paying Tenants fr hell in the basement lied, got landlord arrested, jailed, she had a heart attack, had a restraining border placed on her. She can not go into her own backyard!!!! Tenants installed cams, buys expensive cells, clothes, bike, etc..Place rented to 2-4 ppl now has 11 family members living there. Matter is in housing court. I pray these worms get out soon.

  5. Chris

    I heard a written lease gives tenants too many rights. I’m thinking about buying a second house and renting it out, and having no lease involved. From what I hear, it’s much easier to kick someone out when there is no lease. Any thoughts?

  6. sam

    I have been accepting cash from my tenant until 2 months ago from my section 8 tenant. I had verbally told the tenant that she had to pay in check or money order. One month she paid by Money order and then she stopped paying. She did not pay her, but when I ask her rent, she tells me that she paid in cash and has a eye witness. She is lying and so is her eyewitness. Any ideas how to handle this? Thanks

  7. BILL

    To Sam, I would give out a receipt every time you get a payment. If it goes to court you have a paper trail, they will have to bring receipts to court to prove they paid. Sure they could make a receipt, but if you bring your copies to court, the judge will have to determine who is telling the truth. As long as you cover all your bases and come prepared you should be ok. Good luck!

  8. Phil

    From what I have learned, it is important to be firm and professional with tenants. They are people too of course, even though at times some may act as if they are not. I think the main thing for us to do is research. Find out what works and what does not work. Screening is important of course, but things happen in life that changes situations. I would say screen fairly, be firm and professional upfront, and be very detailed about your expectations (in writing). That way they realize the expectations up front, and understand what the consequences are when they are not followed.

  9. HP

    My tenant wanted to move in quick so I told them I would give them 2 options – Wait 2 weeks for me to clean the place or move in and clean it and I can pay them. They choose to move in.

    One after another, they want things cleaned, painted, everything fixed ASAP. (they even used 2 bottles for cleaning the carpet which would equal to 4000 sq ft when the house is only 1100 sq ft). They haven’t paid rent in September and now want me to pay $1800 for their cleaning fee. I asked for a quote ahead of time and wasn’t given one, but she claims she texted me (I have my texts and no quote), which I’m about to send.

    I decided to sell the property and entertaining a potential offer. I’d like to remove them before I close. I can give them the rent which they haven’t paid but don’t feel like giving them anything additional. Is it legal for me to place a ‘pay rent in x days or evict’ notice? I don’t want them to damage my house but they’re more than an average headache.

 

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