If you have a property that you don’t live in, but think has value, you might be considering renting it out. Being a landlord can be lucrative, but it does require a lot of work. And, every now and again, you’ll run into a tenant who is a nightmare. It’s essential to prevent it from happening, but sometimes you can’t avoid it.
Tenants can cause real damage to rental properties, and getting a bad one is one of the single largest risks associated with owning a rental property. Bad tenants can cost you big in maintenance and repair costs, and, if they stop paying rent–as you worry your “friend” might–they can cause even more lost money. Booting a tenant from a property is costly and difficult in virtually all areas of the country; in some places, like New York and California, it is notoriously so.
Screen potential tenants.
You need to be careful about how you rent your space out. In an age of free tenant screening services, there are more ways than ever to avoid bad tenants. It is better to leave the space vacant for a bit than to be trapped in a landlord-renter relationship with a terrible tenant, so be vigilant! You will also, of course, want to make sure you have landlord insurance. If you don’t already have it, get it ASAP!
Handling bad tenants
Sometimes, even the most promising tenant can turn out to be a surprise problem. If your initial attempts to speak with the tenant prove unfruitful, then your best option may be to speak to an attorney. An attorney will be able to give you advice that is tailored to your unique legal situation. They’ll want to see any documentation you have (absent a lease, consider bringing any email or text message correspondence you have records of), and they will want to see evidence of the damage done. How you approach your tenant is your choice; you could attempt to speak to him or her first, or you could let the lawyer do the talking. Your lawyer can help you decide which strategy to try first.
Hopefully, you can secure a lease agreement, collect a deposit, and convince your tenant to be more careful, or else convince him or her to simply move out. When it comes time to rent the space to a new tenant, remember the tough lessons you learn, and be as careful and thorough as possible.
The terrible tenant situation gets even worse when the terrible tenant is a good acquaintance or even a friend. Renting to friends may seem like a good idea, but it can be a nightmare. With friends, we may have trouble broaching difficult subjects. We may also be tempted to waive vital protections. You should check friend’s credit and background before agreeing to rent the place out, and you certainly should get the terms of the lease in writing and charge a security deposit.