Getting Rid of the 10 Percent of Tenants That Cause 90 Percent of Your Landlording Problems

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I have been in the landlording biz for over 10 years now. After you are in the business for a while you start to notice trends and patterns. You begin to acquire that wonderful thing called experience. One thing that my experience has taught me is that generally, it is only 10% of your tenants that will cause you 90% of your problems.

Landlord Problems:

Let’s think about the problems we landlords have.

  • Tenants not paying rent.
  • Tenants paying their rent late.
  • Tenants causing problems for other tenants (ex, loud music).
  • Tenants not taking care of your property.

If you look at and think about this list, you might say it kind of sums things up. If every tenant paid their rent on time, was courteous to their neighbors and took care of your property, this landlording thing would be a breeze. But we know better don’t we.

Related: Tenant Screening: The Ultimate Guide

Proper screening will weed out most of the bad apples. Once you review their credit, criminal and job histories you can usually tell which ones will be nothing but problems. But no matter what, some always get through or take a turn for the worse later on. No one can really see a layoff or a serious accident coming. So I guess there will always be some of these issues.

Why Does this Happen?

But what about the ones that got through the screening? What went wrong? Here are a few thoughts.

  • They got through because I eased up on my standards. Perhaps I was a bit desperate to rent the property. Perhaps I was naïve or inexperienced. Whatever the reason, I have learned not to relax my screening standards. It is a slippery slope.
  • I eased up on my policies. Perhaps I was not firm enough the first time they were late with the rent. Maybe I was not forceful enough when another tenant complained about loud music. Again, I discovered that not enforcing rules and policies is a slippery slope.
  • I did not do inspections. And because I did not, I was not aware my property was being trashed, that I had a really messy person causing that bug problem. Doing regular inspections alerts you to potential problems and issues before they become major problems and issues.

Related: Tenant Screening: The Application & Selection Process – Putting it all Together

Perhaps I should be happy with just 10%. But of course I want to do better. The answer to reducing that 10% seems to be to be more vigilant in screening, enforcing the rules and conducting inspections. Landlords need to be proactive at every level of their business, especially before a tenant moves in and while they are living in your property.

So what do you other landlords think? Are 90% of your problems caused by the same 10% of your tenants? Share your thoughts and stories with your comments.

 

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About Author

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in and manages rental properties in Memphis, TN and is a past president and vice-president of the local REIA group, the Memphis Investors Group.

16 Comments

  1. Nice article :D Summarizes the principles of preventing the problems before they start with good screening, and handling them once they’ve started with proper enforcement.

    You should fix the typo in the title though :P

  2. I do agree with you saying “do not relax your screening standards”!!!!

    We self manage 17 properties that probably span 100miles across from farthest to farthest. In this situation you can’t have a life, work a full time job and have no problems if you don';t have good business rules that guide tenant selection!

    #1: low tenant problems start before you buy the property. Choosing a rental prospect in a top high school but a bit more expensive will make you more money in the long run per my math from friends who bought in $30k per rental areas vs my buying in the $50k and $60k areas.

    #2 I live by this question in my screening: “why do you want to rent this place?” If they say it was the cheapest, they liked the color etc, all non-sticky can change in a month reasons I might toss their app. Certainly not be on top. If they say my brother lives 2 blocks over, my kids are in the local school, I’ll take that person. Sticky reasons for being in your place make a huge difference.

    #3 screen for past on time payments. I use mrlandlord.com. It’s a pain to get setup. It gives you a list of creditors and red, yellow, green on time payments. I don’t care about fico or total debt just pays on time.

    #4 walk out to their car. It has to be clean and neat. old and dented is ok, but it has to be clean. That is if you care about your place being trashed or not.

    #5 savings. “do you have the 1st months rent and security deposit in savings right now?” Most weak and likely to fail renters will show themselves early to not be good financial managers and have savings.

    many more…

    Good topic, but we need to talk more about the solutions I feel.

    BTW your bullet re skipping inspections makes me think that inspections are too late. You need to prevent messy renters from moving in in the first place is my view. There’s things one can ask and do to filter out the problems. IE check their car before renting to them. It would be fun to go back to your messy tenant locations and peer in their car? :)

    • Kevin Perk

      Curt,

      Thanks for your reply. You have some words of wisdom in there. I will think about your last point. Might be a blog post in there. :)

      Thanks again,

      Kevin

  3. I really need some advice about what to do with tenants who follow all the rules, pay their rent early, and cause me no problems; BUT, other tenants don’t like them. They do complain if other tenants are non-compliant, and they can be a bit irritating, but then no tenant is perfect. I currently have a unit for rent next door to them. I can’t rent it because their rep has gotten around the community. It’s worth noting that most of my tenants are related to at least 1 other tenant so there is definitely a “grape vine”. Unrelated prospects have applied, but so far they have all been scary-risky: “We’re getting back on our feet”, “I am self employed but I did not make any income last year”, “I’m moving out of my Mom’s house”, “I don’t have the deposit – could I pay it to you over the next 6 months”. The apartment is ready to rent and has been for 2 weeks. Any reasonable ideas???

    • Tough situation. “A bit-irritating” is probably an understatement if they’ve managed to negatively affect a good portion of your tenants. Quite frankly, the most difficult is going to be to confront them about it and attempt to come to an agreeable solution. I’m not sure what it is they are doing that can be irritating to others but if it is negatively impacting your ability to rent out the adjacent unit, it has to be addressed. It is going to take some very careful leadership to properly address it with them. Paying early and on time doesn’t give a tenant permission to make other tenants’ lives miserable. I would say address it the way you would address loud music… “hey look, I’ve received several complaints about you from multiple tenants… (address the issue)… understand that this is a community and your behavior (loud-music, or whatever)… is not acceptable to having good order… please accept this as only a warning as I’m sure you did not intend to purposely aggravate others… you are a valued tenant, who pays early, follows the rules and I’m sure this is just an isolated event that will not continue to happen…” If that solves it, I’d be surprised, but now you are establishing that TENANTS ARE COMPLAINING ABOUT YOUR BEHAVIOR. In the end, they will stop being so irritating to others or find a new place to stay, which I think is ultimately your desired end state.

      • I may be reading this comment wrong but it sounds like the issue is that they are following all the rules and are calling out the neighbors when they don’t.
        Maybe they are blowing it out of proportion but I’d say that if all they are doing is complaining when other residents are in fact breaking a rule what kind of message does it send to tell them to not tell you when it happens.

        If your rules are so burdensome that people don’t want to live there if someone actually makes them stick to the letter of the law then change the rules. Don’t get mad at the saintly ones that are actually willing to follow them, but expect others to as well.

        • I have very few rules, and those that I do are related to being considerate of others. I am glad that I have a tenant that is willing to keep me up to date as to the events that occur when I am gone. The “saintly” tenants let me know about loud music after 10 pm, smoking in the common areas, and strange people walking through the complex. I am not upset with them, just weary of numerous tiny complaints. I WANT them to share, believe me. I think it is just a matter of the other tenants not liking to be caught and having to listen to my “reminder” speech. Plus, if tenants don’t like a rule, they act like it doesn’t apply to THEM. I haven’t changed the rules, though I have had to add to them, since I took over 3 years ago. But since perception is reality, and some people will believe everything they hear, the extent of the “saintly” tenants’ negative rep is not justified. But there is just no way to convince some people of the truth. Example: nearby tenants accused them of spying on them through the security cameras mounted around the property. The cameras are in the common areas and were installed and are monitored by me. I told them this, but only a day later I heard them tell guests that the neighbor next door spies on them, pointing at the cameras as they said this. Sigh. That crisis has passed – I have rented the unit next door. I just had to wait until an interested party not previously affiliated with the complex came along. Now, onto the next crisis … And I still love my job …

  4. I agree 100%. I just wrote a post about some of the hard truths about landlording. A single bad tenant, in a 100-unit complex, can monopolize all of your time. You cannot keep them.

  5. This is similar to the The Pareto principle, which states that roughly 80% of the effects come from 20% of the causes, and can be applied to most anything in life. Great article about keeping your eye on the ball as a landlord!

  6. I live next door to my rental (thankfully!) but it’s also a resort type area where most of us work 1 1/2 jobs, on average (seasonal jobs at that!) including myself, at times.

    Off the top of my head I look for these things when considering a new renter.
    Please bear in mind this is a partial list of what I look for when meeting potential new renters (I have 100’s or 1000+ other things I look out for, too.)

    If they ask a LOT of legal rental types of questions, I prefer to steer clear of them.

    Do they have the FULL move in funds (and some savings, a good job or jobs) and decent REAL references. In California you CAN be a picky landlord and deny or favor a prospective new renter for credit worthiness.

    If they EVER use the word DESPERATE their app goes in the “Warning! Warning! Will Robinson!” Lost in Space/round file…I never, ever will rent to them.

    Luckily, my area is tight for long term rentals and I receive 200+ serious responses when I advertise house for rent (it usually/often is passed from one tenant to their friend, but not always and sometimes I still prefer fresh new renters so I can do maintenance and a deep clean etc). The vacation rental market in my area is picking up speed, year round and happening quickly. Hence my desire to possibly convert to a vacation rental is tempting when the current renters’ lease expires next spring. I realize this is a lot different but I like the hospitality industry and some extensive experience in that field…so, so temptimg…I just might go for it because I like serving people (to a point) and I’d only do one place, luckily it’s located next door.

    If they seem too picky, I explain my place is a modest non-luxury but clean place (and I often won’t rent to them in fear that they’ll bother me for the simplest or elaborate of things i.e. “Can you tighten that loose door knob?” Sheesh, I mean…the thought that runs through my head is “Don’t you know how to do that thing called turn a screw driver?!” (I would hope so, but you never know these days…)

    Do they have a mostly clean and decent vehicle? This is objective because I live in a mountain town and most of our cars are dented etc due to tourists crashing into us! Not the other way around. Filthy interior of vehicle = major red flag, if just messy, could be a hard worker earning that rent money, yay!

    A HUGE plus is when an applicant tells me their parent(s), they themselves, other close family ARE CURRENTLY OR HAVE BEEN LANDORDS! I’ll quiz them and try to get proof but I usually KNOW if it’s true by instinct after chatting them up about the ups n downs of LL’ing.
    I try to hide my excitement because I WANT them since 99% of the time they turn out to be excellent renters!

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