Sometimes Landlords Create Their Own Problems

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I was sitting around talking with a few other landlords the other day.  Some of these folks were new to landlording, others had been in the business for decades.  As is usually the case every time landlords get together, the discussion turned towards landlording problems.  This time was no different.  As the discussion rolled along, something suddenly dawned on me.   It seemed to me that many of our landlording problems are our own fault.  Let me explain.

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Late Paying Tenants

One problem that always seems to pop up is late paying tenants.  Seems everyone has one or more tenants that are always late with the rent, that we have to spend time calling and chasing to get paid.  Well, this is likely our own fault.

People respond to incentives.  As landlords, part of our job is to create incentives for people to pay their rent on time.  This could be in the form of a discounted lease for prompt payment, but it could also be in the form of tough talk, strong policies and follow through.  We all hate to be the bad guy and we all want to be liked.  But landlording is a business and the rent is due on the first.  How many times have you let someone slide?  How many times have you accepted partial payments?  How many times have you not filed for eviction right away?  If you talk tough but do not follow through with actions, your tenants will learn they can pay late and they will.  You have created your own problem.

Related: Landlords: How To Make Extra Rental Income with Late Rent Payments

Tenant Drama

Another common problem is tenant drama.  Tenant drama can include late night, non-emergency phone calls, fights between roommates, and other nitpicking issues like parking and utility bills.  This drama can drive you crazy as a landlord with the constant calls, the he said/she said fights and never ending requests.  Again, much of this is the landlord’s fault.  As a landlord, you should have set office hours to take phone calls and only take them during that time.  What about emergencies?  Good point.  You need to define what an emergency is on the front end in your house rules.  Your house rules should also state that you do not do tenant drama, that you expect everyone to act like adults and that you will not get involved in roommate disputes.  Setting all of that out on the front end will eliminate a multitude of your problems.

Deadbeat Tenants

Some tenants are just deadbeats.  They never had any intention of paying you rent and are going to fight you tooth and nail when you go to evict.  Proper screening would have solved this problem, because I can almost guarantee that this is not the first time that tenant has done this.  Tenant screening is one of the most important things a landlord does.  Do not be fooled or relax your standards just because someone has cash in hand ready to move in.  Not conducting proper screening will cause you severe problems.

Related: When Tenants Go Bad- 8 Tips for Dealing with the Drama

The All Consuming Job

Being a landlord is not easy.  It demands a lot of time and resources, especially once you accumulate a few doors.  However, we landlords sometimes fail to remember that we are running a business and every business needs systems to survive, prosper and grow.  Systems will give you your time back.  Take time to define what you do and develop systems that will allow you to bring others in and replace some if not all of what you do.  Then you can begin to recoup some of your time.

No Cashflow

Cashflow is king in the landlording business.  Many newbies fail to realize this and make newbie mistakes while some experienced landlords seem to forget it.  People will either overestimate the income or underestimate the expenses.  Again, lack of cashflow is a landlord created problem.  Did you try to force the deal by forcing the numbers?  Did you buy into the hype?  Landlords have to know their market and know their numbers.  Anything less is a disaster waiting to happen.

Learn From Your Mistakes

I will be the first to admit that I am just as guilty as the next landlord of creating some of my own problems and not being tough enough, screening enough or letting go sometimes.  But over the years, we have worked really hard to reduce our problems and thus the level of stress in our life and it is still a work in progress.  Some landlords seem to enjoy the drama and relish crisis after crisis.  Not me.  I would rather learn from my mistakes and prevent future problems.  Sometimes looking in the mirror is where you need to start.

What are some of your landlording problems? Are they self created?

About Author

Kevin Perk

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in and manages rental properties in Memphis, TN and is a past president and vice-president of the local REIA group, the Memphis Investors Group.


  1. Good points. One point you made can’t be used in Illinois, my real estate lawyer told me you can’t give a discount for rent paid early or on-time. And you can’t call a late charge a “penalty”. I think here the max it can be is 5% of the rent. However, I do agree with the essence of what you said, as soon as someone is late you need to enforce it with the late fee and never allow an excuse or they will continue to pay late.

  2. I charge late fees for late rent, but the secret is getting qualified tenants. I own 24 doors, and manage another one. 24 of 25 rents collected by 4/2, the 25th one on the 4th. I work a full time job, in addition to being my own property manager, so I do not have time for drama.

    It’s easy, Income will tell you the tenants ability to pay rent, credit score will tell you the tenants desire to pay rent. That’s all you need to know.

    I would bet that all of your late payers would have poor credit, or poor rent to income ratio. Tenants you should have declined. When you take a tenant in that cannot afford the rent, or who has demonstrated their refusal to pay their bills, it is your won fault.

  3. That makes sense. So far all our tenants have paid rent by the 5th, and we do typically decline at least one or two applications per turnover, I believe to our extensive screening process. If you don’t mind sharing, what do you consider poor credit?

    • I decline many over the phone and email, and typically a few in person even after they have put down a large ($1000) holding fee. The average tenants credit score is slightly over 650, therefore any tenant with a sub-650 is below average.

      Only about 15% of the population has a credit score below 600, why even look at them. 620 is a ‘C’ grade credit score. Mortgage default rates are above 50%, with scores below 600.

      Insurance companies have done studies, low credit scores lead to a higher number of claims. Why would I want to subject myself to a chargeable insurance claim for a low-score renter.

      I try to take only above 650, and very solid income. 3.5x the rent in income would be bare minimum, but not with a 650 credit score. The average household income in my area is ~56K, which would be at least 4x the rent. Many of my renters have a 100K household income and a 700+ credit scores. If I ever do take a lower score, I require a much larger deposit, like $2,000 on a $1,000 rent.

      I do all this in a neighborhood that used to be so dangerous that the cops would not venture in without double or triple back up. I have a post on my blog about it.

      It’s all about the odds and probabilities of making money. I do not hit on 19 at the blackjack table either.

      What is your credit score criteria?

      • Kevin Perk


        You make some great points. I think credit scores are a good thing to examine, however your criteria may be a bit high depending on the market you are in. Here in Memphis, it can be very difficult to find folks with that high of a score. Heck, I know some landlords who do not even look at credit scores because all of their applicants have bad credit. At that point it will come down to other items such as income, length of time on the job, rental history, etc. So, sometimes the criteria and the scale of those criteria you use to screen tenants will depend on the market you are in.

        Thanks for reading and adding to the discussion,


        • It really depends too, on the type of neighborhood. The national median credit score, from Experian is 687, in MN it is 718. The Experian score which runs 330 to 830.

          In Tennessee, the average is 679, So, in Tennessee, you have a slightly lower score. But you still have an average.

          Most investors, and PMs, do not have a clue as to what an average credit score is. They do not correlate credit score to eviction rate. They want people in, so they can charge $$.

          Once you start to look at credit score, and tenant performance, life is easy.

          Find a decent apartment complex close to your rentals. Find out what their criteria is. If they can do it, you can.

          I have written extensively, and continue to do so, about credit score and renter behaviors on my site. I should have a PhD in it…

  4. Good point on the insurance and credit score, although I would think the lower score people are more likely to file a claim when they can actually get the insurance money as opposed to being more accident prone but who knows. Our new absolute minimum credit score is 600, above that we evaluate case by case, but most of our tenants wind up in the 640-675 range. My husband once had some random person with a similar last name wind up with a $75 medical claim on my husbands credit report and that lowered his score 110 points so we try to understand the story behind the score. We also require a minimum $2000 to 1.5 mo security deposit, and addl $500 for one dog. Before we had a min credit score of 580, and we had one couple at 562/588 and 100k/yr W2 income, the guy blamed his bad score on his x-wife; they ended up putting up a satellite dish without asking, letting their kids run so wild in the 10 mo. they lived there that the neighbors put up a fence, and they moved back to Texas giving us 2 weeks notice and breaking the lease after 10 mo. since they hated the Chicago area. All of our renters pay by the 1st or 2nd, we have one who always pays by the 5th and we have other issues going on with her since she doesn’t like to follow our rules, her score is 650. We can’t go to crazy with the rent to income ratio here since Chicago housing costs are very high; $1500-$1800 for a 1400 sq ft 3 bed 1-2 bath 1 car garage in a middle class middle school score neighborhood, and our average income is about the same as your area.

    • I am not 100% sure on the claim vs. money thing, but insurance companies have completed many studies regarding credit score, and “risky behaviors”. There is a very strong correlation.

      When I see someone with a low score, and they have extenuation circumstances, I feel bad, but there are too many renters out there to try to “make one fit”. I would rather just pass, and move on. It is also better from a Fair Housing stand point.

      When you take a tenant with a sub-600, you are really taking a chance. I have multifamily housing, and with the wrong tenant, I could poison my entire building. I want tenants that have the same set of responsible behaviors.

      With a larger deposit, you mitigate quite a bit of risk, but I hear is is a long process to evict in CHI.

  5. Kevin,

    I enjoy reading your articles.

    Here is a suggestion for the topic of your next BP article:

    Rules for Finding a Quality Property Manager

    Many property owners/landlords struggle finding a good PM. For those of us who have properties that are too far away to manage ourselves OR we choose not to manage them ourselves. What are the rules for finding a quality property manager?

  6. When we sign a lease with a new tenant, we stress that rent is due “on or before” the first of the month … with emphasis on the before.

    At the moment, we have ~1/3 of our tenants paying before the first or the month … one tenant pays on the 25th of the prior month like clockwork. 1/2 pay on the first and the last 1/6th pay on the second, sometimes the third.

    We assess late fees on the fourth, so rarely does anyone let things go that late, though this month we had one who still had not paid by the 6th – claiming not to have received our e-mail or text reminders, not the notice he was being assessed a late fee on the 4th. When I finally encountered him at the door of the property, he was adamant that he was not going to pay the late fee because he “had” the money of the first, but wanted to speak with me before paying … but never made an effort to contact me. So I served him a “notice to vacate” – next month, he’ll be someone else’s headache.

    • Please excuse my poor typing and lax proof-reading above.

      The third paragraph should read:

      “We assess late fees on the fourth, so rarely does anyone let things go that late. Though this month we had one tenant who still had not paid by the 6th – claiming not to have received our e-mail or text reminders, nor the notice he was being assessed a late fee on the 4th. When I finally encountered him at the door of the property, he was adamant that he was not going to pay the late fee because he “had” the money on the first, but wanted to speak with me before paying … but never made an effort to contact me. So I served him a “notice to vacate” – next month, he’ll be someone else’s headache.

  7. Excellent advice, Kevin! Not only is cash flow king, but reserves are critical as well. Rentals are a business, stuff happens, almost always when you’re least expecting it, so having money set aside for contingencies is a smart business policy. Newbies should make sure to allot a certain amount of their proceeds to vacancies, repairs and cap ex. Thanks!

    • Kevin Perk


      Yes! Reserves! Should have put that in there as well. How many times have I seen a rental go bust because the landlord had no reserves and something bad happened? Too many.

      Thanks for reading and commenting, I appreciate it,


  8. Good Day,

    Yes, I am a new at this, however I have a property manager. I own a single family and I will be renting out as section 8. In New Jersey the laws have change with section. If the tenant is destroying the property, the landlord can contact Housing Authority.

    Housing will contact the tenant and tell them they have to fixed the repairs if not, they will not longer be on section 8. I think this is excellent, not all but too many move in and destroy a place and move on to the next one.

    I added to my lease agreement:
    no smoking
    satellite dish or direct tv
    no cats or dogs
    all names on lease, if they are not and I find out, I will report this to housing
    no sitting outside on front steps, why because you have a sun porch and a back yard
    no storage on the sun porch
    I have a basement and I stated it is not ment for turning into a room, storage only
    no heaters allowed – too many people use extension cords – (fire)
    all computer(s) electronics must be connected using a power surge supply
    no renovations without permission
    This is my property investment and I have to protect. I want the tenant to make it their home but don’t destroy my house.

    • All great ideas, none of which will work. If you want to keep a property in great shape, avoid Section 8. There is a reason most experienced landlords avoid it.

      You WILL have extra tenants moving in. That is a given. A felon boyfriend, most likely.

      You will NOT have the tenant fix the property, they have no money, that is why they are on Section 8. You will NOT be paid rent if you fail an inspection. You will NOT be able to evict, you have an uninhabitable property, so it is your responsibility to fix it. Get a Judgment from the Court against the tenant if you need to. They have bad credit generally, who cares if they owe someone else money.

      When you go to Court, it will be your dime, against the State’s. They will have a free attorney. And, they might just decide to take you to Court, and hat will be free too.

      Never forget, the Section 8 office is responsible for giving away money, not taking it away.

      If you DO decide to tale Section 8 anyway, look for a Section 8 tenant with good credit. Credit and income have nothing to do with one another. Personal behaviors and credit score are correlated very closely.

      Keep your property in Section 8 condition. That is, if it is not a danger, or not flagged on an inspection report, you don’t fix it. You want a class D property to rent to Section 8 in order to make money.

      • Eric,

        I know section 8 is not the best but everyone on section 8 is not bad and non caring. It could be the same with a person that is working. I don’t know what a class D is however, I fixed my house as if I was moving in there myself, this is just me.

        The waiting list is so long for section 8, Housing have no problems putting you off the program. Some people are waiting over 5 years for section 8.

        What I will do because I am very active in my community, I am going to speak with my senator and suggest they make some changes. A person on section 8 and not working, they need to do community hours, a least 35 hours per week.

        This way they can no longer sit at home all destroying someone’s property.
        The reason why some act the way they do, what is it for them to pay $100.00 or less for rent and so sad, some fall behind in rent and get evicted for non payment of rent.

        Reality will set in, when the have to pay fair market value for rent. We as landlord’s do have the power and let housing know enough is enough.

        I am in favor of letting them stay on section 8 for a number of years and after that they must attend classes leaning what to expect when their section 8 ends. Each year they rent will increase and by the time they have max out on section 8, they can adjust to paying more rent.

        Not everyone is looking for a hand out!

        • Pat, most of we investors don’t want to be crusaders for change; we just want to collect our rent checks like clockwork every month. I commend you for trying, but there are easier ways to be profitable in REI than tackling Section 8 reform.

          I totally agree with Kevin – enforcement will be your issue. If you’re not sure what a Class D property is, search for it in the Bigger Pockets’ forums. There are classes of properties based on neighborhood, age of property, etc.

          I had a Class B SFH with Section 8 tenants and never had any issue. Always got my check on the first of the month, and the tenants paid their portion in a timely manner too. They took good care of the house and reported issues immediately. However, what I didn’t like was the nit picky annual inspections. Some of the stuff the inspectors came up with I felt like was only to justify their existence.

          In the end, I’m not in a hurry to ever have a Section 8 rental again. Too many hoops to jump through when there’s plenty of other prospects out there in the tenant pool. Good luck!

        • Pat, I’m on board. Community service, and from my own experience with section 8, 2 years TOPS for that kind of public assistance. I am very firm about this after working in lower income neighborhoods, and growing up in working class neighborhoods. And, this isn’t to save the tax payer money (which it would), it will stop very capable people living up to their full potential (of course, I am speaking of the VERY large class of generational welfare recipients). I like your points.

    • Kevin Perk


      I do not participate in the section 8 program so I have no experience there. I do like your lease clauses but will say that the problem will be enforcement. You can have all of the rules you want, enforcing them is another matter. You will have to stay on top of things.

      Good luck and thanks for reading and commenting,


  9. Sara Cunningham on

    I agree most of the problems we landlords encounter are of our own making. We strictly enforce late fees on all of our properties and consistently have tenants that pay late. However they also always pay the late fees with no arguments. All the tenants are long term so although I’m not really ok with them paying late since they pay the late fee too it makes it easier to tolerate. Sharon is so right about the reserves not only for the repairs vacancies etc but also if tenants do pay late I know I can still pay on the notes I have.

  10. Good Day,

    Section 8 up date. I received a email from the housing aurhority to go on line and approve the aggrement. Well, I was asking $1,400 a month to rent a house and they came back with $1,188.00. I called and asked how did they come up with this amount, when a one bedroom is almost $1,000 a month.

    The created a file and I was told I would recieved a call back from housing. Well I did get the call back and this is what happen, the tenant only needs a 2 bedroom apartment and housing will only pay for what she needs.

    Ok long story short, this tenant where she live now, pays the landlord under the table $240.00 each month, because housing will only pay $1188 for her rent. There are only 2 people on the lease but she is renting out the other room and making money on the side. Tenant has a 3 bedroom house.

    I cancled the agreement, I do not wish to partake in anything like this. Tenant told my property manager that she pays her rent on time every month, she was told that was not the issue, she was told what her and the landlord are doing are fruad and if they find out you will lose your section 8.

    So, the house listed for rental again!

    • Pat, to the best of my knowledge, there is nothing fraudulent about what the tenant is doing. With the Section 8 tenant I had that I mentioned above, my monthly rent for a 3 bed house was $1200, but due to the tenant’s salary, Section 8 only approved paying about 75% of that – the tenant had to make up the difference. Section 8 was fine with that, and since the tenant’s income was sufficient to cover her share, so was I.

      If the tenant is renting out the 3rd bedroom with the landlord’s knowledge, that is not fraudulent. Now if her lease has a no sublease clause, then she’d be breaking her lease, but it sounds like her landlord is fine with the situation. In this particular situation, you’re probably better off not renting to this tenant, since it seems he/she couldn’t make the rent without subleasing, but I don’t think the tenant is doing anything illegal in Section 8’s mind.

      Hope you get the house rented soon 🙂

      • It is absolutely illegal. As a previous poster has stated, only people named on the lease can be there. Section 8 tenants get away with live-in felon boyfriends as they are only ‘visitors’, and have a driver’s license with a different address.

        The Section 8 participant is making more money than is claimed on the paperwork. That is illegal. They might not even be elligible for Section 8 if that money is claimed.

        The Section 8 office only allows the tenant to pay a certain amount, and only approves a living quarters based on their needs. They cannot rent a 4BR, if they only need 3BRs.

        Landlords sign an agreement that states what is the total rent. They would never approve the extra rent, it is too much for the tenant to afford.

        The landlord, as well as the tenant are in the wrong here. I would guess the landlord is not claiming the exta income either…

    • Good decision. If you would have rented at the higher amount, and the Section 8 office found out, you would be in the refund business and yourt contract cancelled. And your renter would pocket her rent.

      This is not unusual for a Section 8 tenant. You should expect extra tenants living in your building when you have Section 8. You should also expect thay they willl be worse than your tenant, in terms of criminal record, credit and income, or else they would be in their own place.

      Section 8 is for very experieced landlords only, yet they avoid those tenants lke the plauge. Unless you have a ‘D’ class rental, look for tenants that match your rental.

  11. Hello Sharon,

    It is fraudulent, there are no sub leasing with Newark Housing Authority. Only the people names on the lease are allowed to live in the house. If Newark Housing Authority finds out there are more people living in the house, you will lose your section 8. They are assisting them with your rent and not to bring in additional families.

    In New Jersey, the tenants salary are connected to section 8 this way the can monitor their pay and to ensure they can rent what they can afford. They can put in for a 5 room house, but if section 8 say they can only pay a certain amount it is up the landlord to accept and he can not take any money on the side. I know every sate is differnet.


    • Hi Pat! Well that is good to know about NJ, and you are right, every state is different. We did everything above board with Section 8, and they approved my tenant paying my rent even though it was more then they would pay me for the house. I see here though that the difference in our situations is the sub-lease issue.

      Anyway, thanks for sharing your experience. It is informative. Now I know 🙂

    • Kevin Perk

      Pat, Sharon, Sara and Eric,

      I did not know Section 8 rules could vary from state to state and I bet a lot of readers did not as well. I had a one size fits all idea with regards to Section 8 in my head but that does not seem to be the case.

      Thanks for all of your comments,



      • Hello Kevin,

        As mentioned before, why would section 8 rent a family, 4 bedroom apartment/house when a application requesting a two bedroom. Section 8 only rent what you need, not what you want.

        Now, imagine, getting a four bedroom and renting out the other two, now they are making more than the landlord, and section 8 is paying over 60% of the rent. I don’t think so.

        Once you received section 8 you can take it to any state, this is true.

        I spoked with section 8 main office this week, and I asked the question, what if you find out the tenant have other people living in the house, he said it must be reported.

        In New Jersey, this is a law, if you have someone stay in your home over 30 days, they are now considered a resident, now you will have to go to court to have them removed.
        In section 8/ housing, a guest can only say no more than 14 days at a time. However, we know this is not the case, this is an on going problem for section 8.


        • Section 8 gives a rent voucher, good for the amount that the family qualifies for. There is a maximum based on tenants income, and size of rental needed. If a landlord will take less for a rental, i.e. get paid for a 3BR when it is a 4BR, that is OK.

          Section 8 rentals are had to come by for tenants in states like MN where it is optional. The Section 8 office takes what they can get. Many novice landlord think it is a great deal, guaranteed rent. But if you have a 3+ BR, you are likely to get a baby mill tenant, and have lots of unsupervised children and drug dealing teenagers.

          Why not just get a decent credit scoring applicant with a solid job that will pay rent?

          I was a Section 8 landlord in my early days. One of my tenants live-in boyfriends moved out after 3+ years and became a murderer a couple of months after the move out. Luckily it was not in my place.

          There are good tenants in Section 8 too, but your risk is MUCH higher as a landlord in Section 8. It’s like telling the Blackjack dealer you want a hit when you have 18 showing in your cards.

          Landlording is not a game for everyone. Landlords go broke, like any other business. Some Landlords think that the free money is the best money, but is generally forces them to trade maintenance for profitability.

  12. Sara Cunningham on

    In Okahoma a Section 8 tenant is allowed to make up the difference. I have a tenant who has at times qualified for full payment by Section 8 and at other times has to make up the shortfall from her own money due to her fluctuating income. This is reviewed yearly and set each year.

    • Hello Sara,

      This is true depending if you have housing or section 8, some have to show every 6 months or 12 months. Inspections are done every year. I think inspections should be done at least twice a year.

  13. I 100% agree. I don’t care if you are in a “A” or “D” class neighborhood: YOU let that wonderful tenant, or bonehead in, after getting their rental application. I hate when landlords complain about neighborhoods and people, then find out they let people in their homes I would very quickly decline to enter mine.

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