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3 Ways Your Tenants Can Hurt You (and What to Do About Them)

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Your tenants are central to your rental property investment. Without paying tenants, you can’t profit from your property! But tenants can hurt you, which is why you need to be careful. Vet your potential tenants and build professional relationships with your renters so that you can avoid these three big problems!

Non-payment of rent

Your tenants make your properties profitable by paying rent. So there’s one very obvious way in which they can hurt you: they can just stop paying rent! If they do that, your income property will stop generating income fast.

When tenants don’t pay rent, you have some options as a landlord. You can evict them or take them to court over the payments, for instance. But those are rough options, and the costs associated with these processes will cut into the money you get back. Plus, some states have laws that favor renters over their landlords.

Sometimes, it’s better to cut a deal with the tenant and agree on a payment plan or move-out date. Best of all, of course, is avoiding such bad tenants in the first place! Fortunately, that’s not too hard: with quality online landlord software, you can usually get a tenant screening report free.

Damaging the property

Making money with a rental property comes down to a pretty simple equation: you need to make more in rent than you spend maintaining the property. When you add up taxes, repairs, maintenance, insurance, and the costs of running your business, they should be less than you’re taking in as rent. Makes sense, right?

Of course, this means that failing to pay rent isn’t the only way a bad tenant can hurt you. They could continue to pay rent—keeping your income the same—but then damage your space, resulting in higher repair and maintenance costs and more depreciation on the property. This doesn’t have to mean that your tenant is actively destroying the space, by the way: simple neglect is enough to cause real damage. If your tenants aren’t telling you when there’s a leak or a problem with the heat, then you’re going to see small issues become very large (and very expensive to fix).

To keep your property looking its best, you need to maintain a good relationship with your tenants and set the expectation that they will clean and care for the space—and let you know right away if repair or maintenance work needs to be done. You can hold up your end of the bargain by responding promptly to maintenance requests, which will endear you to your tenants and encourage them to keep reporting any issues to you.

Annoying the neighbors

Nobody likes obnoxious neighbors. You don’t actually have to live with your own tenants, of course, but others do—and if your tenants are making enemies in the neighborhood, it could come back to haunt you.

Repeated complaints could lead to legal issues. Problems in the neighborhood could lower property values. And if you’re renting to multiple tenants in the same area, one bad one could cause you to lose multiple good ones. That’s no good!

Be careful with those background checks, and make sure you know whom you’re renting to. Set clear expectations and communicate with your tenants, building a good relationship that encourages them to treat you and their neighbors fairly.

Exposing you to criminal liability

Wait, really? There’s a lot that a bad tenant can do to you, but it’s hard to believe that any tenant could do something that could get you arrested.

But it’s true! In certain situations, a landlord can get in legal hot water over how tenants use their spaces. It’s your responsibility to be diligent and make sure that your tenants aren’t using your properties as crime headquarters. But you’re not a police officer, and investigating and shutting down such things can be dangerous. That’s why it’s so important to get a full background check on any potential tenants!

The key is to avoid problems like meth before they arise. If they do arise, call the police right away.

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