13 Red Flags for Troublesome Tenants (+ 9 Totally Insane True-Life Tenant Stories)

13 Red Flags for Troublesome Tenants (+ 9 Totally Insane True-Life Tenant Stories)

4 min read
Dave Van Horn

Dave Van Horn is a veteran real estate investor and CEO of PPR Note Co., a $150MM+ company managing funds that buy, sell, and hold residential mortgages nationwide. Dave’s expertise is derived from over 30 years of residential and commercial real estate experience as a licensed Realtor, real estate investor, and private lender.

Experience
Beginning his career in construction and as a Realtor, Dave bought his first investment property in 1989. After years of managing his own construction business, Dave became a full-time real estate investor, specializing in fix and flips, buy and holds, and eventually commercial projects, before moving into note investing in 2007.

Over the past decade, Dave has also invested his time into becoming a connector and educator, who helps others achieve success. He focuses jointly on helping accredited investors build and preserve wealth with his group Strategic Investor Alliance and with general audiences through the annual MidAtlantic Real Estate Investor Summit.

Dave has also shared his strategies and experiences with real estate and note investing via hundreds of articles published on the BiggerPockets Blog and with his acclaimed book Real Estate Note Investing.

Press
Dave has been featured on the BiggerPockets Podcast twice (shows 28 and 273), as well as episodes of familiar podcasts, including Joe Fairless’ Best Ever Show, Invest Like a Boss, Cashflow Ninja, and many others. He also has been a guest of Herb Cohen’s on Executive Leaders Radio, which airs nationwide.

Accreditations
Dave is a licensed Realtor with eXp Realty with CRS and GRI designations.

Follow
Dave’s LinkedIn
PPR on LinkedIn
PPR on Facebook
Twitter @DAVIDAVANHORN

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Last week, I was taking the dreaded continuing education to maintain my real estate license.

You see, although I’m not really a traditional practicing agent any longer, I do keep my license active for tax purposes (unlimited passive losses).

So, naturally, I’ve procrastinated once again, and my selection of remaining courses was somewhat limited. I ended up in a Property Management course, and the irony of which is that about eight years ago I was a practicing property manager at a RE/MAX real estate office. To be quite honest, it was a very long day, but I did still pick up a few pointers.

As I was daydreaming in class, I was thinking back over the last 25 years of managing tenants and about some of the craziest stories I could remember.

First, let me preface by saying I’ve had lot of great people over the years, who actually paid their rent, took care of the property, and helped me and my investor clients acquire and pay for many a nice piece of real estate. And, although we managed every type of residential real estate, we had some doozies along the way too.

9 Insane Tenant Issues That I’ve Seen

So, here’s a list of some of the worst tenant situations I’ve encountered and not necessarily in the order of severity:

  • A tenant with three kids defecated all over the house after living without water for three months in the middle of Summer before the Board of Health shut them down. By the way, the Board of Health is a quick way to evict.
  • A tenant shot a cop, and then a SWAT team destroyed the unit in pursuit of the suspect with everything from teargas canisters to battering rams.
  • There was a DEA drug bust. They ripped out every drop ceiling tile in the unit.
  • I witnessed a tenant barbequing in an enclosed hallway of a multi-unit. (It wasn’t even raining out!)
  • One unit had fleas, bedbugs, and termites so bad that the Township condemned the building.
  • A tenant filed bankruptcy and lived in the unit for a year rent-free. (It’s harder to do that today based on the new bankruptcy law.)
  • A tenant burned the basement steps and floorboards as firewood to heat the house with the fireplace.
  • A tenant burned the house down cooking fried chicken for breakfast and falling asleep drunk.
  • I even had a tenant, whose snake ate a neighbor’s small dog.

Some of these tenants may have already been in the property when I bought it, or they may have lived in properties that I managed for others. Even so, many of these situations could have been prevented through better screening or recognizing any red flags.

Related: Tenant Screening: The Ultimate Guide

Tenant Red Flags

So, here’s a list of thirteen red flags that we all need to look out at when selecting tenants:

  1. Are they on time for the appointment? If they can’t even be on time for the appointment, it’s likely that their rent won’t be on time either.
  2. What type of first impression did they make?
  3. What was their personal appearance and what did their car look like? How they take care of their personal belongings is probably how they’ll take care of the unit.
  4. Are there gaps in rental history? This could signify that were incarcerated or in a facility of some sort for a period of time. Ask questions.
  5. Did you see where they live now? That’s what your unit will look like.
  6. How many occupants will there be? This helps you predict the level of wear and tear to the unit.
  7. Any pets (or other dangerous animals)? Townships may have ordinances that only allow certain pets.
  8. Any long-term guests or adult children? What’s your policy? For example, are the people on the lease the only ones allowed to live there? Or, will the rent increase if an adult child moves home?
  9. Will they take the unit sight unseen? If they don’t seem to care about where they’re living, how well do you think they’ll take care of it?
  10. Are they flashing cash? This could signify that that the person is selling a drug or product illegally, has received some type of settlement (who you may have to evict later, if they don’t have a steady income), or maybe the previous landlord paid them to leave and they’re using that to money to get the new place.
  11. Do they want to pay the security deposit in installments? If they’re having trouble paying the security deposit, they may have trouble paying the rent. Of course, this isn’t always the case.
  12. Did they get upset you’re considering others? If they’re too aggressive, or get upset easily, they may get in your face or be very hard to please during their leasing period.
  13. Do they whine and complain about their current landlord? They could’ve had an awful landlord, or they may whine and complain about everything.

These are just some of the many red flags I’ve seen over the years, although not all of them will lead indefinitely to troublesome tenant situations.

Related: 16 Big Red Flags to Watch For When Looking for Tenants

Typically, I ask a perspective tenant, “Why did you move?” Once, I had one respond with, “We couldn’t afford the late charges anymore.” Inconsistent payments in their rental history may be one of the more obvious red flags. But, we do need to be careful out there. As my instructor and property manager, Mike Perry of RE/MAX, taught in class, you have to be proactive and discuss expectations repeatedly, and upfront, with any and all tenants.

In fact, he even gives tenants a list called, “21 Ways to Lose Your Security Deposit,” and it includes things like not returning keys, leaving a dirty oven, etc. He also sets the stage for any restrictions on building use. Personally, I’ve seen everything from auto repairs and rock bands, to meth labs. So, we all do need to lay down what our future expectations will be.

Obviously, I might sound like I’ve seen a few things, but I’m sure the BiggerPockets Nation has a few stories to tell as well. So, what’s your craziest tenant story, or what red flags have you seen over the years?