Landlording & Rental Properties

How to Protect Your Rentals Against Tenant Abuse (a.k.a. What I Learned From a Hoarder House)

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I’ve found that there are two ways to learn a lesson in life. The first is through education, and the second is through trial and error.

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Although the former is a preferred method, the latter tends to stick with you for much longer.

The great Helen Keller said it best: “Life is a succession of lessons which must be lived to be understood.”

It is for this reason that I no longer stick forks in outlets, mix beer and liquor, or date girls with neck tattoos.

But I digress…

Now, as much as I agree with Ms. Keller’s hypothesis, it’s always nice to be given a heads up on life lessons in the event that the lessons happen to stick with you.

On this particular occasion, I consider myself fortunate to have just been a member of the peanut gallery.

Related: Easy Ways Homeowners Can Protect Against Unethical Property Managers

The Premise

Just the other day, I met with a great gentleman whom I had worked with in the past. He said that he had a property he was looking to sell and offered to let me take a look at it. We agreed to meet in front of the house early on a Saturday morning.

When I arrived (with my poor fiancé and dog in tow), he greeted us alongside his property manager. We chatted for a few minutes and then got down to brass tacks.

He said, “Just so you know, I haven’t been inside this property since we bought it a few years ago… so I’m not sure what it looks like.”

“Understandable,” I said, acknowledging the fact that the gentleman owns dozens of properties and naturally delegates the visitation duties.

However, the property manager (of many years) quickly chimed in and said, “I also haven’t been in the property for a long time, so I’m not sure what it will look like either.”

(Wait! Stop the tape. Neither the owner nor the property manager knows what kind of condition this property is going to be in?! Uh oh.)

Now, if this were a $1.5 million dollar mansion in Orange County, I might not be concerned. However, this is a C property in a neighborhood where the median house price is $65k.

This is about to get interesting…

Related: The Big List of Roles Property Management Companies Need to Fill Expertly

The House

The second we walked into the property, we were hit by a solid wall of cat urine smell. Mattresses were lying on the living room floor, food was burning on the stove, and feline fecal matter had been merely swept into the corners (needless to say, my dog loved it). The walls were brown (unintentionally, of course), cabinets had been knocked over, and the place was in a stunning state of disarray. Mind you, this was not an owner-occupied property. This was a RENTAL!

I felt like I had just been transported into an episode of A&E’s Hoarders mixed with a little bit of Breaking Bad.

As a matter of fact, it looked a lot like the property Anson Young videotaped back in February!

After a few painful minutes of burning nostrils and feigning interest, we finally left the house.

Naturally, the owner apologized.

However, I don’t blame him for the wreckage. He hired a property manager (presumably) under the assumption that said property manager would be checking on the house throughout the year.

That unfortunately did not happen.

So what DID happen? Where did it all go wrong?

I’ve decided to break the issue down into two categories: Correlation vs. Causation. Below each of these factors, you’ll find some BiggerPockets reading material that could help you avoid this nasty situation yourself.


Failure to Find the Right Tenant

Just because a tenant pays his or her bill on time every month does not necessarily mean that they are the “right” tenant. In this situation, for example, the amount of money it will cost the owner to repair the property in the future will far surpass the amount that he received in revenue over the years.

Recommended Reading:Tenant Screening: The Ultimate Guide

Failure to Find the Right Property Manager

Please don't take this article as me attacking property managers; I'm not. There is no doubt in my mind that property managers can be a great asset to a real estate investment team. Personally, I love my PM and wouldn't trade him for the world. However, if your property manager isn't doing anything but taking 10% of your rent… you need to find a new one!

Recommended Reading: How to Find an Awesome Property Manager

Failure to Provide the Tenant With a House That They’re Proud of

I understand that there is no need to fix a property up more than necessary based on the market and comparable properties. For example, a C class house doesn’t need a pool and granite countertops. However, I’m a firm believer in fixing up a property to the point where a tenant is proud to live in it. By doing this, chances are you’ll end up with higher rents and a higher quality tenant.

Recommended Reading: “8 Expert Tips for Rehabbing Buy & Holds for Maximum Rentability


Failure to Ensure Accountability on the Property

As President Reagan said, “Trust but verify.”

How do we as property owners ensure accountability for our properties without just doing it ourselves? Well, I didn’t know the answer to this question. So I posted my conundrum in the forums and got some great responses.

Here are a few options to consider to make sure this never happens to you. They are listed in order from “Least Time Consuming” to “Most Time Consuming.”

  1. Create a checklist for your PM and tenant to sign. When your property manager checks in on your house twice a year to make sure that there are batteries in smoke detectors, etc., have them sign a checklist along with the tenant saying that the inspection was complete. Once it's complete, have them email it to you for your records.
  2. Have the PM take photos. On top of the checklist, ask your property manager to take photos during their bi-yearly inspections. Make sure that they understand you aren’t trying to snoop; you merely want to be fixing potential issues before they become a problem.
  3. Check out the properties yourself. The old adage will always ring true: “No one cares about your properties more than you do.” Obviously, this is the most time consuming option, but will also give you the best peace of mind. Whether it be once a month, or once a year, swing by the property yourself and make sure it is in good working order.

Do you have any more recommendations to solve this problem? Have you seen this issue first hand?

Feel free to leave comments below and help out your fellow investors.

Tyler is a pilot by day and aspiring entrepreneur by night. He started investing in April of 2014 and acquired three properties in the first 8 months. His goal is to become financially independent ...
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    Stephen S. Wholesaler from Holiday, Florida
    Replied over 5 years ago
    There is a third way to learn things. It is by analytical thinking about what may happen, risk assessing the possibilities for likelihood, and then preventing them by preemptive actions. Merely relying on someone to tell you, or waiting for “trial & error” happenstance to clue you in, is a gross mis-use of your most valuable asset. stephen ——————–
    Tyler Flagg Investor from Pensacola, FL
    Replied over 5 years ago
    Great point sir. Thanks for your input.
    Ayodeji Kuponiyi Investor from King of Prussia, Pennsylvania
    Replied over 5 years ago
    i agree with stephen. Being proactive as oppose to reactive is best when managing properties and tenants. I take pride in my property and therefore I would go and check up on it every month.
    Deanna Opgenort Rental Property Investor from San Diego, CA
    Replied over 5 years ago
    Um, I presume you mean you would drive by every month. If you expect to go inside and inspect every month you are WAY over the limit, and will drive away good tenants. As much as they may like you, if you show up every month and wanting to tour their personal space that is CREEPY. I doubt you’d want to be giving tours of your kitchen, bedroom & bathroom every month….
    Tyler Flagg Investor from Pensacola, FL
    Replied over 5 years ago
    Haha. Drive-by is correct. Thanks for making that clear.
    Tyler Flagg Investor from Pensacola, FL
    Replied over 5 years ago
    I couldn’t agree more. I think it’s a great idea to set up a system one way or another from the very beginning to make sure this doesn’t happen. Thanks for the post!
    Kyle Hipp Investor from Appleton, Wisconsin
    Replied over 5 years ago
    So did you buy the house? 😉
    Tyler Flagg Investor from Pensacola, FL
    Replied over 5 years ago
    It seems so perfect right? lol. Nope…but I would love to flip it. However, I doubt I could get it for a low enough price.
    C Hawkins
    Replied over 5 years ago
    My brother recently learned that his Property Manager is allowing potential tenants to enter his property unsupervised. He is literally handing them the key to the property. Is this legal?
    Jason H.
    Replied over 5 years ago
    @C Hawkins…. My property manager has done the same thing. They said “it was just easier”. Well, I put a stop to that from happening again. Your brother should either prevent them from doing it again or find another PM. As far as PM’s checking on the property. From my experience most do a physical visit just once a year. If you have the wrong tenants a whole lot can happen in a year. I always do drive-by’s of the property monthly but again, a lot can happen behind closed doors. I think at the end of the day you just have to trust that everything will be OK. If it’s not, well, that’s part of being a landlord – it doesn’t always run smoothly.
    Philip LaRoche from Cape May, New Jersey
    Replied about 5 years ago
    Hawkins and Jason, It is funny that you mention this issue. I am a regular on to follow the trends in my area. My wife does a lot of the research of the area and she brought this exact same issue to my attention last night. She showed me that there was a property being sold and listed on that had the access code to the lock box on the listing for all to see. This would scare me if it was my property. The first thing that comes to mind would be my liability should someone enter the property and get hurt or claim to be hurt. If this was the doing of my PM or Agent they would be fired the very second I became aware of this activity. These types of people are hired to aide me in various aspects of RE to include protect my liability while they are actively representing my interests. We jokingly said imagine if would be squatters have internet access this would be a perfect listing for them to find. On another note on this topic, why does a person hire these people? I would think it is because they don’t have the time to show the house themselves. So hiring someone who also does not want to show the house defeats the purpose. I could send someone to the house unaccompanied just as easy as my agent. In that case the agent worked themselves out a commission for the ease of showing. Regardless of legality is it ethical for an agent or PM to collect a fee for showing your properties without actually being present. I would say they collected their fee for poor performance. Best wishes. Phil
    Jason Miller Investor from Aurora, Colorado
    Replied over 5 years ago
    A whole lot can happen in even 1 month. If you suspect anything might be changing with the unit, order an inspection from your PM. Issues can be sudden increase in water bills (ie the new boyfriend), late rent, criminal reports, neighbor complaints, extra vehicles, suddenly parking in the driveway and not garage (great place for trash) etc etc. I had a fully renovated unit that required a renovation within 3 months. Tenant passed all the background checks, yet she invited someone to stay that committed armed robbery. Had I paid closer attention to bills, her request to sublease the unit (which we denied), and increased house traffic, I may have saved myself a 5k turnover and eviction.
    Brett Armstrong
    Replied over 5 years ago
    Up Here in Canada in the little town that I live in there is a city ordinance that all rental properties have to be inspected every three months. We have a form that we use to check off for each and every room in the house and or apartment. When the inspection is done the Property Manager signs and the tenant also signs. This way there is always a record. Now having said that not all communities have this law on their books. It might be a good idea to check with your city council and see if this idea could be implemented in your town. More work for us PMs but in the long run well worth the time spent in order to protect the investment of the owner. Mistakes happen but all PMs should take pride in the properties that they manage and be more than willing to take care of the property like it was their own.
    Darren Sager Investor from Summit, NJ
    Replied over 5 years ago
    You need to stay on top of your properties and not let them be an afterthought. This is why I don’t invest far away from where I live. I think showing a tenant that you’re around and you give a darn about your investment also goes a long way on how their perceive your property. Some tenants will take more work, others not, but still over time you’ll learn which ones you need to do this with and which ones are more responsible. This is why I personally prefer higher end rentals. I think in most cases you get more responsible tenants, but that’s not always the case. I’ve had tenants that make $500K plus a year that were complete slobs and stain my granite counter tops because they never wiped up their red wine. In the end do all you can to protect your buy and holds. They’re your retirement account in most cases. If someone had access to your Schwab 401K account wouldn’t you stay on top of it? Thanks Tyler for writing a great article!
    Philip LaRoche from Cape May, New Jersey
    Replied about 5 years ago
    Darren, Agreed. I have a long distance property in FL and I recently transferred to NJ. I walked through the property with the tenant the day she moved in. I returned a few months later to find problems. I just returned from another visit and noted other issues. Had I been closer I would have been able to keep on top of these items before they became an issue. I am friendly with the neighbors and on each visit they have filled me in on the going ons of the property. Neddless to say I am not renewing the lease with this tenant. The issues were simple enough to fix but the tenant continues to miss treat the property. Simple items like not bringing the trash to the curb at least one of the tow pick up each week. Instead she will wait until her trash cans are over flowing to bring them to the curb. Please note my property I cover the lawn care and trash removal costs. When the tenant brings the cans to the curb animals rip into the over flow trash bags. You can imagine how the neighbors feel about that. Having properties near your location will definitely mitigate issues like this. I look forward to the day I can sell this property. Phil