How to avoid bad tenants

[2BAD4U]

We've all heard the stories and have or will experience bad tenants, so how do you avoid them?

1. Don't be greedy with your rent, too high and you will only attract people who are more willing to pay the higher rent because they are desperate. This may be because they can't get a property due to poor history and are willing to pay the higher rent just to get in.

2. When you get a good tenant, look after them. Don't be greedy with your rent increases. Keep up the maintenance on the property.

3. When problems start with a tenant, act quickly and immediately.

4. Use a property manager (some will argue this point), but get references first for both the tenants and the property manager. I have also had bad property managers. You need to keep an eye on both.

5. Don't feel sorry for the tenants, or give them just one more chance. This is flexible and should be based on history / situation. But don't let the problem go on too long.

Trying to evict bad tenants can be a long and drawn out process. It can and will cost you money so do all you can to avoid bad tenants but still be prepared for it to happen.

Feel free to add your tips.

[Wildkactus]

another couple of points (some the same as above, just agreeing with them)

The location, differnet suburbs may bring different types of tenants.
(that said there is good and bad tenants in all suburbs this is where your property manger comes in)

The type of property. A poor Quality property in a good suburb may not attract the right tenants or a top quality property in a poor suburb may do the same.

Always use a well trusted and liked property manager, as a bad manager can be worst then a bad tenant, and in good times some are like some real estate agents don't want to work for the money.

Maintain your property well, no one likes to live in a badly maintained property.

look after your good tenants, don't give them a reason to move.

so happy property investing.

[2BAD4U]

More tips for landlords from news.com.au (http://www.news.com.au/business/money/story/0,25479,24627638-5013951,00.html)

[crunchynut]

hi all,

some good advice above.

i have just purchased an investment property and i'm on the lookout for a property manager. any recommendations of good property managers in perth (bentley region).

thanks

simon

[2BAD4U]

Hi Crunchynut and welcome.

I'll send you a PM.

[francinemelbour]

My advice search and check the back ground of your tenant to be before signing any documents or something.
Explain the rules and regulation just to be cleared.

[adrianm]

Hi all

Great tips 2BAD4U, wildkactus and francinemelbour

One other thing to note is having Landlord Protection Insurance.
In my experience, you can do all of the checks and put everything else in place and still bad luck can strike and you end up with a "bad" tenant.

Landlord Protection Insurance is peace of mind if this was to happen, is relatively inexpensive and its also 100% tax deductable.

I have it in place on all of my rental properties.

Happy wealth building!
Adrian

[R3aLEstat3]

well, no negative reactions or comment here. Your tips is absolutely great. Credits to you man

[Ladyhawk]

thanks for the great tips...
anyone know of a reputable property manager in melbourne?

thank you

[proptyman]

getting the right property manager can be a tricky business! I have dealt with quite a few over the years and believe that you should do your research first. Try to get feedback from other landlords/tenants about good agents and then try them out! If they do not look after you properly then you can move on to another one later - it does often depend on the type of property you are offering too and the location of the property as was mentioned before!

all the best,

Regards
Peter S (propman117@gmail.com)
High Rent Return Properties - http://www.ozpropertyinvest.com/hy/2022.html

[arondel]

Here are the best ways to avoid the bad tenants like

Note their appearance
Look for forthrightness and honesty
Look at the application
Double check the references on the application
Conduct a thorough screening

[Felix07Richerd]

Personally I think most Tenants would rather that LL didn't comply; then they get 3x deposit back "if they know how, which nobody seems to at the moment".

[EthenGroom]

I would advice that before you allow any tenants to sign the lease and move in, that they should fill in a form which states their details in full, including employment details, next of kin and ex - landlord. Then take the time to follow up on those details. Speak to their ex-landlord and find out what type of tenant they were.

If possible arrange for a debit order payment so you can be sure that you will receive the monthly rent payment by deductions by the bank from their bank accounts.

[PropertyAcademy]

I believe that if more landlords looked after their properties better and were willing to help reasonable tenants live in a well maintained well presented properly, those tenants would appreciate that effort and return the favour. :)

[CSQTownPlanner]

Until the collapse of the mortgage industry under the weight of fraud, real estate had traditionally been viewed as a safe investment vehicle. Skyrocketing prices at the height of the real estate bubble brought many buyers into real estate that was enticed by the idea that they could make money from their investments. While property prices have fallen nationwide, some savvy investors are holding on to their property and renting to tenants.
Dealing with tenants if you are not a real estate professional can be very difficult as I have documented with my tenant from hell stories. The easiest way to lose your investment in real estate is to be a lax landlord and let bad tenants run roughshod over you. Hopefully, with this handy guide, you won’t have too much trouble when you run into a bad tenant.
1. The first rule of being a landlord is to know the rules regarding tenants’ rights in your city or state. Most laws weigh heavily in favor of tenants to combat historical injustices (think slumlords) where tenants had very little rights. It’s is my opinion that the scales of justice are tipped too far in favor of tenants, but if you know the law, you can save yourself some trouble. I have three resources that I use in this area. My favorite is the U.S. Dept. of Housing and Urban Development (HUD) Tenant’s Rights page. This site lists every state and links to information regarding rights of each tenant. I also use Rent Law quite a bit as well. Invest with Passion also has a page with landlord-tenants statutes by state. If all else fails, you can always do an internet search for your state’s attorney general’s website which should list rights from both the standpoint of a landlord and a tenant.
2. The second rule is to know your tenant. Just because someone seems nice and can afford the rent does not make them the ideal tenant for you. Extensive screening of potential tenants is a necessary evil in weeding out good tenants from bad ones. To avoid bad apples, I highly recommend an application and thorough background screening. Your application is your first line of defense in weeding out undesirable tenant. Things that you should ask include current employer, verifiable income, the number of individuals that will occupy the apartment, and if the tenant will have any pets. Rent Law has a great sample tenant application form (MS Word) that you can freely use. Please be sure to consult with an attorney or do a decent web search on specific questions that you may or may not be able to ask in your state and the maximum of any application fees allowed.
3. The third rule is to set minimum standards that you will accept in a tenant. A potential tenant should make a minimum of three times the amount that you will charge for rent. If the potential tenant makes less than that, chances are they will struggle to pay your rent in addition to the basic necessities of life such as utilities, food, clothing and transportation. In order to verify that your potential tenant can afford your apartment, you should ask to see the most recent pay stubs covering the past month. You can go one step further and perform a background check. Trans Union runs a website called My Smart Move, which offers background screening of tenants for around $25. You can charge that as the application fee (which you can collect) or even better, you can direct the tenant to the website where they can enter their own information and pay the fee and you will be sent the report. It safe, secure and shows the tenant that you mean business. My Smart Move allows you to create minimum threshold levels and can tell you whether the applicant meets your requirements for tenancy. You can even find out of the person is a registered sex offender. I absolutely love it.
4. Once your tenant meets your requirements, your last line of defense is documentation. The most important document that should exist between you and your tenant is the lease agreement. You should absolutely have a lease even if the tenant is renting your property from month-to-month. Things that you want to cover in your lease include:
o rent amount and form of payment
o damage to premises
o provisions for late payments or returned checks
o security deposits
o use of premises (you don’t want your tenant to turn your property into a club)
o number of occupants
o assignment and subletting
o alterations and improvements
o surrender of premises, default and abandonment
o maintenance and repair
o pets
o utility payments
o renter’s insurance
o tax increases
o official record of signature and dates
If you’ve never written a lease before it can seem daunting. Don’t worry, I have resources for you. You can purchase and download state specific lease forms from Socrates Media that covers all of these topics and more. You can also try to find some free ones online. Rent Law has a general lease agreement (PDF) that you can try to customize for your state.
5. Finally, before the tenant moves in, be sure to take “before” photos of every inch of the property and have the tenant sign a move-in checklist. This way you have proof of the condition of the property before the tenant occupies your dwelling just in case you need any legal help later.
6. I would be remiss if I did not tell you that you could avoid all of these steps by hiring a rental or management company to take care of all of this for you. A decent management company will go through this entire process and take care of your property for a percentage of the rent that they collect on your behalf. Rates vary, but expect to pay somewhere less than 10% for general property management, and perhaps one month’s rent for rental services. This all depends on whether the property is commercial or residential, the size of the property and how much work you want them to do.
Even if you do everything above it is still possible for you to end up with a rotten apple. It’s not your fault. Your tenant’s financial situation can change after you rent the property. You should always treat your tenant politely, firmly but never as friend. If your tenant crosses into the friend zone it will then be harder to take the steps that might be necessary to remove an undesirable tenant from your property.
I know that I mentioned Rent Law a lot here, so I have to say that I am in no way affiliated with or compensated by them. I just find their site highly useful and wish they would call me to work out an endorsement deal. I might be affiliated with some of the other companies that I mentioned. Be sure to check out my disclosure policy on that.

[matthewa]

When you do find yourself in the unfortunate position of having bad tenants, make sure that you get rid of them civilly and legally!

For instance, check out the tips here: http://fidelisam.com/property-management/how-to-avoid-bad-tenants

"If you do end up doing something like changing the locks, it will most likely get you in more trouble than it would help your cause, especially if you end up in housing court. "

Don't take the law into your own hands!

[CSQTownPlanner]

Good information! I have been in residential property management for seven years (now working in the commercial sector) and have had some BAD tenants in the past. Oh the stories. Good luck in turning your “bad” tenant into a “good” tenant. I would ask the tenant to leave, and if they do not agree to move out, the next time they are late on rent serve notice for non-payment of rent. Then do not accept any money, unless they are paying in full, taking payments means the process starts all over again. Most tenants know the game and they will play it. You just have to outsmart them at their own game, which sometimes takes quite a bit of time. Good luck.

[electra]

We've all heard the stories and have or will experience bad tenants, so how do you avoid them?

1. Don't be greedy with your rent, too high and you will only attract people who are more willing to pay the higher rent because they are desperate. This may be because they can't get a property due to poor history and are willing to pay the higher rent just to get in.

2. When you get a good tenant, look after them. Don't be greedy with your rent increases. Keep up the maintenance on the property.

3. When problems start with a tenant, act quickly and immediately.

4. Use a property manager (some will argue this point), but get references first for both the tenants and the property manager. I have also had bad property managers. You need to keep an eye on both.

5. Don't feel sorry for the tenants, or give them just one more chance. This is flexible and should be based on history / situation. But don't let the problem go on too long.

Trying to evict bad tenants can be a long and drawn out process. It can and will cost you money so do all you can to avoid bad tenants but still be prepared for it to happen.

Feel free to add your tips.
Yeah some of the landlords does these kind of silly mistakes and became greedy,they just want that they get the maximum rent from tenant which is their biggest mistake,i really admire your point that take good care of your tenant and look after them nicely wisely....

[Maria_Jane]

Hi all

Great tips 2BAD4U, wildkactus and francinemelbour

One other thing to note is having Landlord Protection Insurance.
In my experience, you can do all of the checks and put everything else in place and still bad luck can strike and you end up with a "bad" tenant.

Landlord Protection Insurance is peace of mind if this was to happen, is relatively inexpensive and its also 100% tax deductable.

I have it in place on all of my rental properties.

Happy wealth building!
Adrian

Thanks for your input guys. I came here in this forum looking for solution to this problem and I found exactly what I need. I will check how I can set up this Landlord Insurance thing fast, before my two other properties gets rented out.