Hi everybody, I am from Texas. I started a 2 year Rental agreement last year. I verbally told the tenant if he keeps up with his payments I will reconsider his rent (rookie mistake) and offer a discount for the 2nd year. I did, I would take $50 off his rent if he was willing to get renter's insurance (another huge mistake I didn't put in the contract). By the way, he is supposed to give property management proof this month or else it will go back to the normal rate in the contract.
The tenant has almost never paid on time, he paid his dues, but past the grace period. I never charged his late fees. There was a leak on the garage ceiling last year. Small pieces of Wet plaster fell on top of his car and we got the builder to fix it. He made a fuss but it was eventually sorted out. I realized eventually what a big mistake I made dealing with the tenant myself. I sub contracted property management recently. He wouldn't talk to the property management lady and tried contacting me. My property manager told me not to reply. He send an email saying how I promised a discount and $50 off is a slap to the face...so on and so forth. I just wanted to give a summary of the hole I dug myself in, but thankfully due to property management I was able to get help. Also he continuously complained about things like the toilet roll holder broke, and left a hole on the wall. Isn't that the tenants fault?
Keep in mind that I am not a full time Landlord, I am in the Army, Active Duty and in school. My schedule is extremely busy, but I always did my part to make sure any maintenance was punctual.
I just wanted to get a second opinion on this situation. I don't have to talk to the Tenant anymore since property management counts as the landlord right? Any advice, criticism, or comments? Let me know. Just trying to learn and get better at this.
If the tenant has been properly notified that the PM has taken over, you are actually meddling to get involved. Back away slowly, do not dig the whole any deeper, and learn from this experience. If the PM is good they will point out how his rent compares to market, professionally diffuse the situation, and/or be firm enough to show them the door if they continue to be a pill.
Well,hopefully you have hired a property manager who is tough enough to lay down the law with the tenants . The manager needs to assert themselves and make the tenants acknowledge that they are to address any correspondence about the property to them and not you.The management especially wants to correct any mistakes you may have made last time by making the tenants aware that tardiness with rent will not be tolerated and will be swiftly dealt with legally.Any maintenance problem must be reported to the manager as soon as possible to prevent further damage.If they disagree with the manager they are free to leave so you can get a better tenant.
My experience is that a tenant like that wouldn't change but it will be your PM's job to decide what to do. Usually, when a tenant can barely afford the rent they start making requests and complaints. When I see this happening I have a talk with them and I ask what the real issue is, 90 percent of the time is money, the rent is too high for them. If that's the case, I feel it benefits everyone to arrange for them to leave on good terms if they cooperate with showing the property and keeping it in good condition. Again that will be your PM's call. As Michell Fischer said, let them do their job, if they are good, they will take care of it.
Initial screening and correct pricing is the key to good tenants and easy management. As simple as this sounds, it took me 12 years to learn this lesson. :)
@John George you made some mistakes so the tenant has been "trained" to call you and whine.
Do not respond to the tenant under any circumstances. Let the PM do the job and deal with the problems. If you hired a good PM, they will correct this situation quickly but it only works if you stay out of the mix.
@John George I would offer to let him out of the lease, and consider this a lesson learned. Don't offer multiple year leases, don't offer discounts on the second year (Common advice here on BP actually has you raising the rent every year) and always charge the late fees.
It's ok to make mistakes. We've all made some pretty big mistakes in our investing careers. That's usually how people find BiggerPockets...
I don't feel it is right to not respond to this tenant, however. I would send a formal letter to this tenant, stating all contact MUST be with the management company. Give the tenant every way to contact the PM that you have, and if he calls you, call back with a message "all further communication must be handled through the PM."
I would also make sure the PM gets that proof of insurance, and DOES NOT accept a partial rent payment in the event that the tenant does not provide proof of insurance, and then tries to pay the reduced rate anyway. Play hardball with this guy, and offer to let him out of the lease he clearly is not happy with.
With luck your PM will soon get rid of this tenant for you. Unlikely he can be trained to pay on time which should be enough reason to evict.
You would be farther ahead to only have M2M leases.
It is good that you hired a property manager. I would never offer more than a one year lease nor offer any rent concessions. If you want the tenant to have renters insurance make that a requirement to rent your property and not a bargaining chip. And when the tenant pays past the grace period you charge them late fees plus file court papers. They will get the message they have to pay on time or move out. Hopefully you learned from this experience and will do better with the next tenants. Hopefully your PM will turn things around or help you get out the tenant and you can start over with new tenants.
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