Hey everyone! Spencer Sutton here with gkhouses. Today I want to introduce to you seven signs that you have a problem tenant.
Because we have managed thousands of tenants and have been doing this a long time, we are experts at sniffing out problematic tenants. Hopefully you never have to deal with this, but we aim to teach you how to detect and deal with these types of tenants.
Sign number One
The number one sign is that they start complaining as soon as they sign the lease.
This actually happened to me very recently. We had a house for rent, and after renting it the tenant immediately started calling with all kind of demands. We make sure everyone interested in a house sees it before they sign a lease. Well, they had seen the house and were totally fine with it.
When a tenant starts saying, “Hey, I am paying this much, I should get X, Y, Z,” you should recognize they are going to be a problem.
Sign number two
Sign number two is when they start falling behind on their rent and struggle catching up.
This may happen very slowly, but over time, they start paying on the 5th, and then on the 10th, the 15th, the 20th. This can lead to a pattern of always staying behind.
This is a big issue for owners who are using the rent to pay off a mortgage or loan. Addressing this quickly is one of the best tactics to prevent the pattern from getting worse.
In your lease, you should have a late fee associated with anything that’s past your due date, and enforce it. As soon as you start being lenient and saying, “Hey, I’ll forgive this late fee,” and you start listening to story, after story, you are going to run into a lot of problems.
I have met many owners that say, “Hey, I’ve got a tenant that pays every month, they just don’t pay on time every month.” And, that becomes a problem for an owner, definitely a problem for a property management company like us as we try to collect rent every single month and we’re trying to do that across thousands of tenants.
Not only is this a problem for owners, but also property management companies like us. We are trying to collect rent every single month, and we are doing that with thousands of tenants. It can be difficult to keep track of it all, but we have a team that is capable and willing to put in the work of spotting bad tenants.
Sign number three
The third sign that you have a problem tenant is if you find pets in a property that does not allow it.
This is a problem. Now, we do our best to ensure that prospective tenants know when a house does not allow pets. Although, there are always tenants that will ignore this and think they can hide it.
If we find a pet, we will fine them and this causes a big issue. People love their pets and you can do your best to keep pets out, but you never know what will happen. Sometimes people move in without a pet, but then four months later for Christmas, they get their kids a puppy.
When you find that your tenant is keeping pets against the lease, that is usually a sign that they won’t live up to other parts of the lease.
I remember going to collect rent from a tenant, back in one of my very first rental houses. I knocked on the door and immediately hear barking from inside the house. I had just had the hardwood floors refinished and put fresh paint on the walls. The tenant opens the door and coming from around the corner was five or six little dogs. After the tenant moved out, I went to inspect the house. The floors were torn up and it was obvious the dogs used the bathroom everywhere. It was not a pleasant experience.
Sign number four
The fourth sign that you have a problem tenant is when they pay with a check or online and it gets returned for non-sufficient funds.
When this happens you have to increase communication, you have to collect rent personally, and basically come a bill collector. This adds stress and conflict to the relationship.
Sign number five
The fifth sign that you have a problem tenant is when the outside of the house is in disrepair. You can check this by simply driving by the house.
If you find high grass, weeds, trash outside then you can just tell they are not taking care of the house. And one thing to point out is if the outside looks bad, the inside is probably worse.
We have it in our lease that all tenants are to take care of the lawn. When they do not take care of the property there is obviously no pride of ownership there.
This is a major problem when you have a tenant who lives in a house governed by an HOA. The HOA is going to reach out and complain to the owner or property manager.
One thing that we do if owners ask us is quarterly inspections. This is a great way to get into the house and check on things. We always change air filters, check batteries and smoke detectors, etc. This gives us the opportunity to take pictures if anything looks out of place. We can send these pictures to the owner and better show them the state of the house with the tenant in it.
Sign number six
The sixth out of seven signs you have a problem tenant is when they ignore HOA rules.
This is a big issue in Nashville and Denver, some of our markets where there are a lot of HOAs.
If your tenant refuses to obey the HOA rules, that’s a sign that you have a problem tenant. The HOA is going to inform you if they have a problem with the tenant.
Sign number seven
And lastly, the seventh sign that you have a problem tenant is when they just stop paying rent.
This is a very obvious one but they may start showing signs that you do not notice. If you have a slow paying tenant, this could turn into a no paying tenant.
When this happens you are going to have to make a decision. Should you evict the tenant or is there a reason why they are not paying rent anymore?
The best way to handle this is to increase communication and decrease the potential for conflict.
So, those are the seven signs that you have a problem tenant. Our hope is that you never have a problem tenant.
The key to reducing your chances is to make sure your underwriting process is buttoned up. You should know exactly what you are doing and what you are looking for. If you know those two things, chances are you will have a great experience with your tenant.
There are things you can control, such as the screening process, but there are also things you cannot control. You cannot see the loss of a job or personal crisis. Be aware of that throughout the rental process.
Owning rental property is always risk because you never know what is going to happen. However, if you start seeing these signs then you know you’re going to have to step up your game.
So, that is all I have for you today. If you have any questions, email me, [email protected] I will be happy to help you out.