How to Avoid Bad Tenants

Not that I've had a plethora of tenant experiences to choose from… but I do have a few experiences where I am able to compare and contrast and see what a good tenant looks like.  If you are renting out your basement you really want to make sure you find a good tenant because you will be sharing your home to an extent with them.

My first tenant experience was great.  They were quiet, they paid on time, they were courteous, they did not complain and often tried to fix problems themselves, they were mature… and did I mention that they were quiet?

The only downside (and this is a major downside) was that they broke their lease because one of them moved back overseas.

The second tenants were not so great.  Although they seemed really nice at first and were very bubbly, they were a little too bubbly.  It was also their first time moving out of their parent's home.  They had a lot of parties.  I could hear them talking late into the night.  It was a little too much.  They were not quiet.  They complained a lot.  That being said, they did pay on time and I am glad that they were not more of a problem than they were (which really isn't that bad).

How to Avoid Bad TenantsMy parents who are experienced landlords have had their fair share of terrible tenant experiences (TTE).  One keyed my parent's car, another took out all the light bulbs in the common hallway, and another turns up the radio all the time so that his pet birds have something to listen to.

As you can see, selecting the right tenant is a pivotal step in making sure that your real estate rental income property isn't a bust (and a huge headache).

Here are a few tips on how to avoid bad tenants:

Screen, Screen, Screen!

When you are having showings for the suite or apartment, make sure you are there or that you trust the person who you are hiring to be your property manager.  Look at their dress, their demeanor, their mannerisms, and their behaviour.  Do they seem really loud?  Do they seem easy going?  Do they seem like the complaining/ advocacy type who knows their tenant rights like the back of their hand?  Did they show up on time?

Like Attracts Like

If you have a quality space to rent out then you will attract quality, responsible professionals.  Update your place, put a fresh coat of paint on, watch Income Property for inspiration (or just watch it to see eye candy Scott McGillivray, yum), and make sure it looks good.  It doesn't hurt to stage the place too, though that's an added cost (which is tax deductible by the way).

Back that A** Up

Well, not really, but back it up with documentation.  Documentation is key.  Have a rental application with their contact information, references, current address, employment etc.  Have a residential tenancy agreement because it outlines all the rules that there are between landlord and tenant.  Make sure you go over it carefully with them and obtain signatures and make copies of it.  There are some economical documents on a website called Law Depot.  Make sure you know that document like the back of your hand.

Another key document to have is the Move-In Inspection Report.  Once you select your tenant after you screen, screen, and screen, meet your tenant for the move-in inspection report.  It's similar to screening the rental car for any damages that are existing except this is for a rental property and not a rental car.  The Move-In Inspection Report allows for the tenant and the landlord to go through the property and assess for any pre-existing damages and note it.  Any new damages that are not “normal wear and tear” after the lease agreement is finished, the tenant is responsible for this.

Hope for the Best but Prepare for the Worst

Even if you do an impeccable job of screening your tenants, you are bound to get a few duds from time to time, if you've been in the business for a long time.  If you would rather spare yourself the hassle of bad tenants, you  might want to consider investing in REITs, where you can invest in real estate without the risk.

4 Comments

  1. C. Franklin on October 31, 2013 at 6:32 pm

    This post hit close to home for me. I’ve had two REALLY bad tenant experiences at a property I inherited when my mother passed away.

    The first was, ironically, my best friend of, at that point, 26 years. She moved in and, granted, the place needed some work, updating (new carpet, new air conditioning system), etc. However, during her 3 years living there, she turned it into a cat rescue shelter and housed more than 40 cats, all closed up in the various rooms. When she moved out, the entire interior of the house was destroyed, including door facings that were clawed – literally – all the way through the wood, and the stench of cat urine that would knock you down. It was completely unlivable and every single surface in the house had soaked in that smell. I had to call a crime scene cleaner to come and treat the concrete foundation, and even then it took two tries to get it to the point where we could apply two coats of Kilz primer to seal in the rest of the smell. We ripped out all the walls, interior and exterior doors, ceiling fans, tore out the entire bathroom, closet shelves and window sills, right down to the studs, ceiling and concrete foundation to get rid of the stench. Then, we had to buy materials to put it all back together again, which took about 9 months and more than $15,000 all told.

    Once I found a new tenant, within three months, the couple that had gotten married the day they moved in (after 8 years and two small children together) had split up and the guy had moved out, he then came back to the house, kicked in the dining room window, and dragged his estranged wife out of bed and proceeded to beat her to a bloody pulp in front of their 2 year-old son. She then moved out (understandable, but letting me know might have been nice) and didn’t even bother putting anything up to cover up the broken window, in addition to leaving dozens of bags of garbage piled in the storage room and behind the house (which free-roaming dogs proceeded to tear up and drag all over the yard).

    It took another three months to coordinate the repair of the window, screens on several other windows, broken interior door (which was brand new!), etc. before finding a new tenant who has now been there since June. Shortly after she moved in, the brand-new central A/C unit went on the fritz (are you KIDDING ME????), but it was repaired shortly thereafter and there haven’t been any other issues so far (*knock on wood*).

    With my (former) friend, I trusted her with all my heart, so I didn’t feel like it was necessary to screen her. I’d known her all my life and she destroyed the property. Then, the couple that moved in were screened, too (though their less-than-stellar credit report should have been a clue, but I decided to give them a chance), and I still ended up with a nightmare on my hands.

    All this to say that, yes, be very careful and, yes, crazy stuff can still happen even if you are.



  2. Kyle on October 31, 2013 at 10:48 pm

    Wow, C. That’s some crazy bad luck. It’s stories like this that make me never ever want to become a landlord no matter what the returns are. We need to invent a metric that is ROH – Returns on Headaches in order to fully comprehend and internalize this stuff.



  3. Young on November 1, 2013 at 12:21 am

    @C- OMG that is a crazy story!! 40 cats?!?! I can only imagine the stench 🙁 domestic abuse in your rental home? Jeez louise!



  4. Betsy @ ConsumerFu.com on November 3, 2013 at 1:53 pm

    Oh my! We don’t have any rental property and probably never will at this point. I read stories like that and I’m glad for it. We have friends who do quite well, though. They started young and have made a lot of good decisions. Hopefully you will have far more positive experiences in the future.



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