As a landlord for nearly a decade, I’ve owned many different classes of properties in different economies and locations. I can definitively say there are quite a few headaches associated with actively and passively managing your rentals.
The term passively managing sounds like an oxymoron. But if you’ve had a passive rental with no work, please comment below. I’d like to hear all about it!
I’ve done both of these things, and below is a collection of less-than-optimal situations I’ve encountered—in order from mild annoyance to major issue.
5 Dark Sides of Owning Rental Properties
Needy, Independent, or Troublesome Tenants
Have you ever had tenants who call you about everything? How about the other way around, where you hardly hear from them?
In my experience, both of these can be just as much of an issue. On the one side, tenants who call for little things can seem time-consuming and irritating. The bright side of this is that they care about the well-being of the property in some way, shape, or form. Their perspective is likely something along the lines of: “I was advised to report issues to prevent being charged for them when I moved out.”
While annoying, the opposite mindset adopted by independent tenants is worse. I once had tenants who “fixed” things on their own without telling me—like screwing shelves into cupboards from the outside (and many other “fixes” similar to that).
Was it nice living in blissful ignorance that all was right with this rental? Yes.
Was it a rude awakening when I learned the opposite was true? Yes.
Ultimately, independent tenants like this are the reason you see specific lease clauses preventing such work without express permission.
In terms of my experience with troublesome tenants… this one was interesting. The property management (an issue in and of itself that’s further down on this list) somehow leased to a drug addict who had just been evicted elsewhere and had a recent felony on her record. I could go into detail about the condition in which she left the property, the multiple instances cops were called to her residence for disturbances, and more. But I’ll just say this went about as well as one could have expected.
Strangely enough, this has actually been one of those issues I’ve encountered but not had to worry about too much. There are people who have encountered much worse, as pests such as bed bugs are notoriously difficult to get rid of and particularly expensive to treat—especially if you have a tenant who isn’t cooperating.
I find most tenants don’t enjoy pests in their homes and are willing to do whatever it takes to get rid of them. I had a duplex where one of the tenants complained of bugs. We found it was, indeed, bedbugs. It was caught very early, and we figured that it had entered the home through a used couch she had acquired. The problem was expensive to handle but mitigated rather quickly.
Fortunately, the bugs didn’t spread to the other units—they stayed bug-free. This isn’t always the case, though.
I once was deliberating the purchase of a quadplex, until the wholesaler disclosed the unit had bedbugs. This was particularly worrisome, because one of the tenants wasn’t allowing people into her unit to view it. We decided we weren’t interested in purchasing it, but the wholesaler was pressuring us into a sale, even offering to pay for a bed bug inspection.
What do you think the results were? Yep. Infested again. This is where bed bugs can definitely jump the list from annoyance to nightmare, especially in a place as large as a quadplex. Hard pass.
We had a dishwasher break and leak into a townhome rental a few years ago. Water damage can be a nightmare, but we were lucky in a way, as it was caught fairly early.
Unfortunately, the kitchen shared a wall with the neighbor. Water ended up leaking under his flooring and destroying it. This not only led to a water damage claim but also a liability claim. Luckily, the insurance carrier itself was fairly easy to deal with; the kitchen got new cupboards due to the damage, and the neighbor’s flooring was repaired quickly.
The following news of the insurance rate going up $600 a year because of the claim was… not great news. That same year a storm rolled through and necessitated the repair of both our primary residence’s roof and a rental’s roof. So, there we were—four claims in one year.
When insurance shopping, it was even worse news to find out that some carriers deemed us uninsurable due to our claims. This discovery made me angry. Why would insurance carriers punish you for using the service you pay them for?!
This is why insurance appears higher up on this list. I’m still angry about it.
Contractors are so infamously difficult to deal with that there are thousands of articles out there on how to pick the right one and/or not get screwed over.
I once had an AC contractor take a picture of a unit, citing the reasons he needed to charge me hundreds of dollars for a repair. I asked him to point out specifics in the picture to essentially corner him into admitting something I knew to be true. Much to his surprise, I was fully aware of what my AC unit looked like—and that unit wasn’t mine!
He immediately backpedaled when I pointed out how strange his claims were, considering the unit wasn’t mine. His excuse was that he sent the picture by mistake. Too bad I’d already paid for part of the repair already…
I’ve also had contractors simply not show up for a job multiple times—sometimes the same contractor for the same job more than once. Patience dwindles when this happens, as tenants need their house to be in workable and livable order. We can’t have them waiting on hot water at any point or for AC in the middle of summertime or for heat in the middle of the winter. That’s why contractors are worth their weight in gold to me.
At this point, my go-to guy in one of my out-of-state rental areas gets thank you notes, gift cards at Christmas, and all my referrals (of which I have given many).
I had three property management (PM) companies over the span of five years. Our current one is incredible, and I have no complaints. The first two, however… let’s just say, I have stories.
I heavily screened all of these PMs, thinking I did my job and would have no issues. Buckle up, everyone. This will be a ride!
PM 1 placed the aforementioned recently evicted ex-felon in the home. Our relationship for the first year was actually pretty great until a certain PM was hired to run their company (and my properties) into the ground. This company mistakenly rented out a property for $200 less than the market monthly rent and was so slow on maintenance fulfillment that five tenants went without heat in the dead of winter for over a month.
The tenants rightly called Code Compliance, which almost condemned the rental. I didn’t get notice of this until one of the tenants found my contact information to tell me directly. PM 1 was promptly fired.
PM 2 is quite possibly the worst PM I’ve ever encountered to date. Sadly, I recommended them to another investor friend before finding this out.
PM 2 did the following:
- Regularly brushed off work orders from tenants. The same tenant contacted me constantly, saying their order hadn’t been fulfilled after weeks of waiting. He was luckily very considerate and understanding.
- Overcharged for everything by misreporting time spent repairing things to get paid more (by up to four hours!) and always refusing to provide an invoice from the company doing the work. This was only discovered when a few places accidentally sent me the invoices directly. The PM said it was a mistake the first time, but the truth was they’d repeatedly done this. By the end of it, we could prove over $5,000 of fraudulent charges.
- A myriad of other transgressions deteriorated the relationship, leading to us requesting a meeting with the owner. He immediately declined and escalated things with a string of rude and physically threatening emails (with many F-bombs). Other landlord reviews revealed this bizarre behavior was typical of the company.
You’re probably thinking: “You must’ve done SOMETHING to get him that riled up, right?”
The answer is no… then, yes. After being turned down in such a rude manner for a meeting, we disengaged and forwarded the emails to my investor friend (also a lawyer) to notify him of the situation and ask for advice. He posted screenshots in an online review, adding his poor experiences alongside the other landlord reviews. The reviews led to additional hostile communications on the owner’s end, and we had a horrifying discovery shortly after: The owner had erected websites that gave out prior clients’ personal contact and address information, saying slanderous things about them.
It didn’t seem that he had time to make a website for either of us yet, but even now, I scratch my head as to how quickly this situation spun out of control. This resulted in a slight win for us, but who really wins after an experience like this?
My friend was able to do his magic to get our (and his) stolen money back. In addition, the websites were all taken down, and the owner got his real estate license suspended. The company is no longer in operation, unsurprisingly, but their one-star reputation remains.
We moved on to PM 3, who manages our rentals to this day (and who had been eagerly accepting business from PM 2 for over a year). We have no complaints, no issues, and a great working relationship. We’re sorry it took so long to find this one but relieved to have settled down with someone we trust managing our rentals.
As a landlord, it’s been a bizarre ride—especially that last fiasco. And there are many other headaches that can crop up, like tenants not paying rent and requiring eviction or tenants leaving the house in terrible shape.
There are so many issues one can encounter. I’ve had a condo building catch fire and luckily not damage our unit, water damage from an above condo seep into another condo, and had tenants who were victims of a break-in—which understandably resulted in them breaking the lease with one day’s notice.
Things happen, but it has definitely helped me temper the reactions I have to them. Something broke? We’ll fix it right away. Water damage? Yikes! Let’s handle it. Issue with tenant? Kindness is king.
The fact is, some headaches are certainly preventable, but not everything is—even if you try your best to do so!
What’s your most horrifying landlording story or one you’ll never forget hearing about?
Share in the comment section below!