When Tenants Go Bad- 8 Tips for Dealing with the Drama

3 min read
Kevin Perk

Kevin Perk is a full-time buy and hold and fix and flip real estate investor with over 15 years of experience. He and his wife Terron operate Kevron Properties, LLC, a boutique real estate investing company in Memphis, Tenn.

Experience
Kevin was a past president and is a current board member of the Memphis Investors Group. He’s also a blogger and writer who has authored hundreds of real estate investing articles on BiggerPockets and his own blog, SmarterLandlording.com, some of which have been featured on The Motley Fool and MONEY: Personal Finance News & Advice.

Kevin is also host of the SmarterLandlording podcast.

Originally from the Washington D.C. area, Kevin moved to Memphis to attend graduate school at The University of Memphis. After receiving his master’s degree in City and Regional Planning, Kevin climbed the planning career ladder to eventually become planning director of a county in the Memphis metro area. He “retired” from planning in 2003 to pursue real estate investing full-time.

Since “retiring,” Kevin’s main real estate investment strategy has been to buy and hold, otherwise known as landlording. Generally working in historic Midtown Memphis, Kevin is also known to fix and flip grand, historic homes when the right opportunity presents itself. He and his wife Terron (who is the principal broker at Perk Realty) have participated in dozens of real estate transactions in the Memphis metro area.

Kevin has the heart of a teacher and believes in helping others through education. An instructor of college-level geography for over 25 years, Kevin also regularly participates in seminars and panel discussions at such forums as the Memphis Investor’s Group and the Single-Family Rental Summit.

In addition, Kevin has been interviewed in publications such as the Memphis Commercial Appeal, the Memphis Daily News, and the Foreclosure News Report.

Education
Kevin earned a master’s in City and Regional Planning from The University of Memphis.

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Sometimes despite your best efforts, despite your best screening techniques, despite firmly laying down the house rules at move in, some tenants will go bad.  These tenants appeared fine at the move in, they passed your screening tests and none of the red flags were flying.   Suddenly however, they go bad and are now creating a horror story for you, your property and your other tenants.

What do I mean when I say “go bad?”   Here are a couple of examples.

They spend a long week-end drinking and yelling at each other which culminates in assault and destruction of property.  They stop taking their medications and spend nights screaming at the top of their lungs.   They overdose on heroin and the police become involved, kicking in the door and waking up the whole complex at 3 AM.

Unfortunately, these things would not necessarily show up during the screening process.  This was their first assault case, so there was no police record.  How do you screen for mental illness?  And believe it or not, heroin addicts can be quite functional.

8 Tips for Dealing with Bad Tenants

So what to do if any of these or a similar situation happens to you?

  1. First, be calm.  Yes the situation may be bad but you are only going to make it worse if you go in half cocked.  Spend the evening thinking about the situation.  Sleep on it if you can.  You will find that you will make a much calmer and rational decision about what to do in the morning.
  2. Review your lease.  You have clauses in there about criminal and drug activity being grounds for automatic termination of the lease right (If not you had better put some in.)?  These clauses are your ultimate trump card, but let’s hope you do not have to go all the way to eviction court because that takes time and is expensive.  You want the problem resolved ASAP.
  3. Get prepared to take very quick action.  Your other tenants have seen what happened or have been dealing with the situation for a while now.  Their eyes are now on you to see how you handle the situation.  They are asking themselves. “Will they make this problem go away or let it fester?”  “Will I have to move to get away from this problem?”  A property can spiral out of control quickly if problems like this are not handled in a timely manner.
  4. After completing number 1 above, talk to the offending tenant in a calm, but firm manner as soon as possible.  Let them know you are aware of the situation and let them know that they are in violation of their lease and are expected to move very soon.  DO NOT back down here.  Let them know you are ready and willing to go to court and evict them.  As an incentive and depending on the situation, you may want to offer them their security deposit if they are out by a certain date, with all of their belongings and if the place is clean.  Get a firm date from them of when they are moving and get it all in writing.  Surprisingly, many will willingly go because they do not want to add to their troubles.
  5. Stay on top of the situation and follow up, follow up and follow up every day until the situation is resolved.  Let them know that you are not going to drop the issue.
  6. Get in touch with the emergency contacts which are listed on your application form.  Be careful not to divulge any personal information, but you can let the contacts know that you are concerned and feel the individual may need some help.  This can help move things along.
  7. Never, ever get angry.  As I said be calm and firm.  Trust me, being calm can really go a long way.  You do not want to get confrontational.  Simply explain your position and be firm.  You want your property back and this problem resolved ASAP and as the old saying goes, you can catch a lot more flies with honey.
  8. While following 1 through 7 above, get the eviction process started.  Talk with your attorney.  Get the paperwork together.  Remember you want to act fast and get your property back.  Hopefully you will not need to go all the way to court but sometimes the threat to do so is just not enough.  You will have to take action.

I wish these types of things never happened, but they do.  I wish I could figure out a way to screen for everything.  But I can’t.  Some things will slip through despite your best efforts.

It can be stressful, but the way you react and the way you handle the situation can make all the difference.  Always take the high road.  Remember your other tenants will be watching to see how you react.  Work hard at resolving the problem with the points I have noted above.

So, how did your tenants go bad?  Share your horror story with your comments.

Photo: eighteen1