Investing in a rental property is a great way to get into real estate. As a landlord and property owner, you’ll enjoy the growth of the real estate market while also making money from rent.
But for your rental property to be profitable, you’ll need to make sure that you have the right kind of tenant. With the wrong kind, your rental property could end up costing you more money than it’s making for you!
Here are four terrible tenants who you absolutely must avoid.
The Party Animal
Hey, we’re not above a good rager. But when the keg goes flying out of the window, it matters whose window it is.
And if you’re the landlord who is responsible for a property that your tenants are regularly using to throw wild parties, you’re going to have some very unpleasant repair and maintenance expenses.
So keep an eye on potential tenants rental history — and check for a criminal record, too.
Parties on your property are one thing. But crimes? That’s a whole different animal.
As a landlord, you are shielded from the legal consequences of some of the things your tenants might choose to do. But you do have some liability, and you need to be aware of just how dangerous certain types of crimes are to the physical spaces in which they take place — to say nothing of the property values!
Do your research, know your responsibilities, and don’t lose your property — or a court case — over a meth lab on your property or another type of criminal issue.
Nobody likes hanging out with someone who is extremely messy. But this is your tenant, not your roommate. So if he or she makes a huge mess, that’s no big deal — right?
Wrong. Clutter is more than just an eyesore. It can hide more serious problems with a property until it is too late. And failing to clean up grime and perform other basic tasks can invite mold and other damaging problems into a property.
In extreme cases, hoarders and other very messy people can destroy homes. A security deposit is not sufficient insurance against a really messy tenant, so be careful!
Look, it doesn’t get any simpler than this. They call it an income property because it’s supposed to generate income. You’ve invested big bucks in your rental property, and you continue to pour money into it to maintain it.
You want the value of the property to rise, of course, but this is a profitable enterprise only when you get rent payments. That means you need a tenants, and you need ones who pay rent.
Some tenants don’t. Some are dishonest, while others simply can’t afford the rent. The latter is a tragic situation, and a number of lower income Americans are struggling. But you need to protect your own financial interests, and that means making sure that you rent only to trustworthy tenants with good credit and strong incomes.
You need tenants who will pay the rent!
Avoiding Terrible Tenants
Nothing is worse for a rental property than a problem tenant. A bad tenant will destroy your property, put you in the middle of a legal battle, or simply stop paying rent. That’s bad news, but getting rid of a bad tenant isn’t easy. Thanks to renters’ protections built into many state and local laws, you’ll have a hard time evicting anyone in a way that is even remotely efficient or cost-effective.
So here’s your solution. You need to avoid renting to problem tenants in the first place.
Fortunately, that’s not too tough to do. You can screen your tenants by choosing reliable landlord software solutions that make it easy to get a tenant screening report free. With the right listing, an online rental application, and strong tools for checking potential tenants’ backgrounds, incomes, and credit histories, you’ll be in a great position to keep your income property profitable.