SFR landlords how do you keep renters from ruining your properties?

8 Replies

Well I've been reading the horror stories from LL with troublesome tenants. How do SFR LL keep there houses from being a pharm lab and tenants trashing your homes? Thanks

Good tenant screening and a strong lease.  Read Brandon's "The Ultimate Guide to Tenant Screening" here on BP for a good start.  

Getting a good tenant reminds me of a term we use for buying high quality tools: "pay for quality and you only cry once; buy cheap and you'll cry a lot."   My point being: put in the effort upfront and spend a bunch of time making sure you put the right tenant in there in the first place and you'll be a lot happier in the long run even though it takes a lot of work upfront.  

Do credit checks, employment verification, reference checks, rental history checks, etc. and make sure you don't skimp on this part.  This way you know you're at least starting off on the right foot.  

And keep a strong lease that you go over with them in detail so that they know what is expected of them.  This will prevent a lot of headaches.  Check out the BP podcasts on tenant selection.  They're great.  Good luck!

I agree with William that good tenant screening is paramount.  Buying quality homes that better tenants want, helps increase the quality of applicants. 

I second @William Murrell thoughts on carefully qualifying and screening tenants.  If the property condition allows, you can set the bar at "nothing less than perfect credit" which weeds out most questionable situations, even ones you feel may work out well.  (But do NOT bend those limits lest you end up discriminating or being accused of discrimination.  Apply chosen limits to all applicants.)

But sometimes even good tenants can turn into bad ones.  A lease can help, but, sadly, often after the fact.  All leases should include a section on illegal activity violating the lease which can be used to leverage the tenant out, if needed; As in, "Leave asap and authorities will not be alerted."

The good news is good-to-bad tenancy does not usually happen overnight.  There are slow-building signs: high-volume, late-night traffic; a mostly non-present lessee; once clean conditions giving way to filth, etc. These conditions can be observed by regular visits.

If there is concern, talk to plumbers, contractors, etc. to let you know what they see when they visit.  Most vendors have experienced really-bad conditions and can gauge them well and see some things an owner wouldn't.  For some reason, some tenants have no issue leaving paraphernalia out while a plumber visits but would hide that from an owner.

Also be on good terms with your neighbors.  They can, and usually will, alert you if there are any questionable issues arising.  Keep those lines on communication open.

Check to see what limits you can have for a security deposit.  If the property attracts mostly less-than-perfect tenants, increase the security deposit if law allows.  Most tenants assume 1-months rent for Sec Dep is a given, so some don't even mind losing it; But if 2-months is the limit, that may be enough to motivate a tenant to care more than usual.

And finally, become (somewhat) comfortable with the possibility the property will be used or abused at some point.  Let that understanding motivate you to prepare yourself for that day.  Save extra funds, find a good, quick locksmith to re-key locks asap, start a relationship with a real estate, owner-tenant lawyer who can manage the legal situations, understand local laws and what would and would not apply in varied cases, have a stable of vendors and contractors who can do any and all work needed to return the property to desired condition, start a folder with necessary paperwork for court filings, connect with property managers or other owners who can help with information, be prepared to document EVERYTHING, etc.  Hopefully that day will never come, but if/when it does, make sure your lifeboats are prepped and ready.  Doing that in-the-moment is not good for the property or you.

Here's hoping all the worry is for nothing.

In the early days we bought a little house and fixed it up real nice.  One of our colleagues at the local rental association said to us, "So you bought yourself a little doll house? Fixed it up real nice.  Tenants will move in and will trash it in no time!"  We did not let that deter us.  We have done well and now have 15 rental units and only had to do 2 evictions in 19 years.  Occasionally a tenant has done some significant damage, but so far nothing that was insurmountable.

We put an emphasis on offering good rental units (B & C), maintaining them well, establishing keen rental criteria, thorough tenant screening, a strong rental agreement, clearly discussing every aspect of the rental agreement with the tenant before we hand over the keys, establishing and maintaining good relationships with tenants, good relationships with neighbors who will alert us as needed, a good relationship with local law enforcement, regular property inspections, swift follow-up to rental agreement violations, sufficient insurance and a sufficient reserve fund.

We stand behind our mission statement:   "We strive to provide safe, clean, affordable, comfortable, and quiet housing for responsible renters in the neighborhoods of West Vancouver."

I have my units at slightly under market rent, it lets me pick and choose who I want as tenants.  I don't require perfect credit, if they had perfect credit chances are they would be buying, not renting, but I want someone that pays their bills on time, has good rental and work history.

As they saying goes, tenants don't normally go bad, they normally were bad when you got them,,,screening is the key

I have been managing as many as 85 of my rental houses in Northern Calif, for the last 20 years using what my friend Fixer Jay DeCima calls, MANAGING YOUR TENANTS BY MAIL. This procedure diffuses a lot of emotion out of the owner-tenant relationship.

See, then "Jay's products".  Send me a message if you have any specific problems to discuss.

Good luck.

Good tenants don't turn bad once they move into your property.

It's simply a matter of being patient and selective and never letting your guard down.

As long as you treat every applicant the same and set standards on who you would rent to, you won't run into problems 80% of the time.

As everyone is stating, run background reports and live by the motto "trust but verify."

The best way to attract good tenants is to own good properties. You pay more, buy you end up with less headaches.

Nice properties attract nice tenants and create a nice net worth.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here