What percentage of your tenants cause problems???

5 Replies

Just curious, on the percentage of tenants cause problems. Could be property damage, breaking leases, evictions etc.

I find the Pareto principle, also known as the 80/20 rule to be a pretty good baseline.  80% of them are dream tenants - pay on time, keep their word, take care of the house, etc.  The other 20% pay late, need constant reminders to send payment, etc.  

I do lease options as my exit strategy and get them to agree that I will give a discount on their rent if they don't call me for repairs and take care of the home like it's their own.  After all, they are buying it.

Zero.

Jeff, can you give some insight on your tenant screening process?

@David H. - welcome to BP.  In my experience with what we own, it has been 1 property out of 6.  Let me explain...

We own 6 doors (2 SFH, 2 duplexes) in the Indianapolis area. We don't have problem tenants but we have a single property that continuously had tenants that we had problems with. It did not matter who we put in, issues always arose - mostly with tenants losing their jobs. The other 5 doors have tenants that pay on time and maintain the properties great.

 The one "trouble" property had evictions of the last 3 tenants.  Thanks to help from the BP community we tightened up our rental policies and screening processes.  This has broken our issue and as of today we have rid ourselves of tenant issues (knock on wood...).

For property maintenance issues, we maintain them at a high level to prevent the calls.  We conduct annual inspections, furnace cleanings, etc.  Preventative maintenance has reduced the repairs. 

We also have a clause in the lease that the tenant is responsible for all appliance repairs (not furnace or air) which includes stoves, fridge, dishwasher, and microwaves.  Tenants are required to deliver them back to us in working order less normal wear and tear.  They effectively "borrow" the appliances from us.

In lease breaking - we allow it IF they pay for the time of the turnover until the new tenant has moved in.  We have done this multiple times and it allows us to repair/rehab each unit without losing the rental income.  It's a win-win scenario.

In the 8 years we have been leasing rental units, we have had about 60 days (between all units) of vacancy time that we did not receive rent.  Even on evictions, we have had the units rented within a week.  This is done as we are conducting the normal turnover maintenance.

Finally, location of the property makes all of the difference in the quality of tenants.  We research and are very picky with the property purchase.  Better areas (A, B C+) usually will produce better tenants that take care of your investment.

Not trying to give legal device in any way but just supplying my opinion from my experience.

We manage about 250 doors. Screening is the key. CALL not the previous landlord but the one before them. If they move to often, N/G. if they are at their moms house or some other relative- I want to see where the mail is sent- PO BOX- N/G. If they do not qualify for your rental assurance program N/G.

We offer several ways for them to pay rent. online, auto, walk in etc. We are TIGHT with our 5 day grace. they get emails and text notifications. If we do not get correspondence back- that month it is set to go to eviction. That's it.

We have a 2-4% problem rate.

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