If you’re in the real estate investment biz, you’re no doubt going to come across a bad tenant at one time or another.
No matter how good your screening process is, how diligent your property managers are, and how savvy your investment strategies can be, it’s just bound to happen. Tenants can sneak past the screening process, good tenants can go rogue, and sometimes, bad things just happen.Bad tenants come in all kinds of flavors. There are lazy, neglectful tenants that run your rental property into the ground by simple lack of upkeep and hygiene. There are rowdy, unruly tenants who disturb their neighbors and make a mess with parties and a wild lifestyle.
There are tenants who like to complain, argue, and fight with your managers about everything. There are even bad tenants who break your lease at every turn—bringing in extra illegal tenants, pets, and doing all kinds of outlandish things to your property. Unauthorized construction, destruction, and damage!
And that’s not even to mention the kind of bad tenants that get into downright illegal behaviors.
So how does a real estate investor handle a bad tenant, when a bad tenant can vary so much? What do you do?
5 Tips on Dealing with Bad Tenants
1) Have a Solid Property Management Team
When it comes to dealing with tenants of any kind, your property managers are your number one line of defense. In this business, they really are your best asset! Never underestimate their value. A property manager that is skilled in conflict resolution, anticipating issues, and proactive in finding solutions to problems is going to be able to diffuse and de-escalate tenant problems before a tenant can even get into the ‘bad’ category.
When you are faced with a bad tenant, a solid property manager is going to be able to keep the stress from getting to you, the owner. They know the laws about dealing with tenants and will know what strategy is going to result in the best, least painful outcome for you. That’s why it’s so important to invest in good management from the get-go!
2) Try to Mediate
It can be all-too easy to focus on the pains a bad tenant is causing you and your profits without considering why a tenant might be behaving badly. In some cases, a little listening, empathy, and conflict resolution might be all it takes to rectify whatever the issue is that’s causing a tenant to act out. Sometimes, it’s not. But moving towards calm, collected listening is always going to be better than lashing out, complaining, or shutting down.
Not all bad tenant situations have to end in evictions, or even with a sour note. You can reach a peaceable resolution.
3) Move Quickly
When it comes to a bad tenant situation, it’s never too soon to deal with it. Letting a situation go only allows it to get worse—you may think ignoring bad behavior is a good idea, but it needs to be addressed. Firmly, calmly, and quickly address these issues either in person or through your property management team. Don’t think that once is enough, either—keep on top of the issue until it is entirely resolved. Even if you’re not dealing with a duplex, apartment, or other multifamily situation, other people are looking and watching to see how you deal with a bad situation. It affects your reputation.
4) Review Your Lease Agreement
Even if you don’t even up having to evict a tenant, it’s always good to be up on the terms of the lease agreement. Maybe there’s an out you can give a tenant when it’s just not a good fit—something where you can both walk away from the situation and move on without hard feelings. Just re-familiarize yourself with the terms, just in case you need them.
5) Prepare to Intervene
When good tenants go bad, there’s usually a reason for it. Depression, mental health issues, hanging around with the wrong crowd, and other emotional problems can all be noticed by your property manager and fellow tenants. You may need to intervene as more than an owner or landlord—your tenant might need help from a loved one, or professionals. Make sure you have their emergency contacts so that you can alert them of problems if needed. If you must, contact the authorities regarding any illegal activity on the premises. If you suspect a tenant is suffering from mental health issues, that’s noteworthy! They need help from medical professionals.
Bonus: Keep Your Emotions in Check
Dealing with a bad tenant can bring out some strong emotions. It’s stressful, annoying, frustrating—you name it. It can put a strain on your finances. It can be a long process. There will be times when you’ll want to lash out. But above all, you and your property managers need to keep your emotions in check.
Always be calm and firm in your dealings with your troublesome tenants. Consistency and levelheadedness in face of stress will bring you the best results.