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How to Handle Tenant Disputes: Part I

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This post is compliments of Amy aka “YETInvesting”.

If you’re a new rental property owner/manager, or if you’re just not comfortable handling tenant disputes or confrontations, then you might get panicky just thinking about having to confront tenants about issues that arise.

My boyfriend has this problem.  Apart from his current rental which began just a year ago, he has no prior landlord experience, and watching him learn how to handle issues has reminded me of how terrified I was when I first started.  When I had to handle my first tenant complaint over the phone, I remember my hands shaking because I was so nervous.  I’m an introverted person, so I hate talking to strangers anyway.  But this was going to be even worse: I wasn’t just introducing myself to someone I didn’t know, I was going to be fighting with them over money!  Yikes!  Maybe most people are braver than I am from the get-go, but I felt like I was going to throw up.  Good way to start a phone call, right?

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Getting Rid of a Bad Tenant

Graphiti-PDThis post is compliments of Amy aka “Yetisaurus”.

If you have thought about being a landlord, you have thought about the possibility of getting rid of a bad tenant.  The first two rules of being a landlord are (1) collect all of your rents, ON TIME, and (2) keep your rentals full.  But that’s not the end of the story: it is equally important to get (and keep) good tenants in your rentals.  If you have multiple rental units near each other, such as a duplex, fourplex, or even an apartment building, a bad tenant can spoil the whole bunch.

Tenant screening is critical.  It’s important to run income and credit checks on your prospective tenants, and to meet all of the people who will be living in your rental, and maybe even their pets (photos can be deceiving in terms of size and personality).  But what if someone makes it through your screening process, and turns out to be a bad apple anyway?

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My Renter Bounced a Check

Bounced CheckIf you have been following along, you know that my rent collections are outstanding; this month I had trouble.  My renter bounced a check.  I have not had a truly late payment in several years, other than the one tenants that I inherited when I purchased the building.

I have had a few payments after the first, but always received before the late fee kicked in after the 5th, and have not collected late fees, or even waived them, for rent paid on or after the 6th in a long time.

However, I recently had a check returned to me from a payment that was not honored by the bank.  My renter bounced a check.  Yikes! my mortgage is due and I am short rent.

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How to Provide Rental Property Appliances (No Good Deed Goes Unpunished)

This post is compliments of Amy aka “Yetisaurus”.

PunishedNever underestimate the amount of headaches you can have with rental property appliances.  When my boyfriend moved in with me about a year and a half ago, he decided to rent his place out for some extra rental income.  Because we were combining households, we had no need for his washer and dryer, BBQ, or refrigerator.  He figured that he’d be a nice guy and offer those items to potential renters for their use while they remained renters.

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How can I Vacation as a Landlord?

beach-641548_1280-PDIt’s been a few days (weeks?) since the last post.  All things are going well, September rent is starting to come in already.  I was out of the area in International Falls, MN for a few days, and did not have much of a cell signal.

I was able to keep in contact with my tenants, although no major issues were encountered.  As I begin the mental (and financial) transition to living on rental income alone, I have started to document the process and thoughts as I go.

While this blog is important to me, it has a lower priority than my real job, or my rental responsibilities.  It’s even lower than my daily 3-mile walks with my dog and girlfriend.  The dog certainly thinks so.  I do try to keep life in perspective, especially over the past year, as my true few ‘free’ hours are often commandeered by another higher priority task with very little notice.  I am slowly getting into the retirement mindset.

Here is how my recent vacation as a landlord went.

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Simple Appliance Repairs for Landlords (or Homeowners)

Appliance repairWith any issue, if you can do some simple appliance repairs as a landlord, you can save a ton of money.  In my rentals, I find that some appliances are worth fixing, some are not.  Here are a couple of recent simple appliance repairs that I have completed.

I typically buy fairly cheap appliances.  I always buy new, and make sure that they are 100% clean for all new tenants.  Of course, I also expect the tenants that are moving out to keep them clean.

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How to Get Rid Of a Couch For Free

Get Rid Of a Couch As a landlord, especially if you cater to a low-income tenant base, you will no doubt have to get rid of many stuffed chairs, love seats, hide-a-beds, futons, mattresses, box springs and couches.  And more.  If you know how to get rid of a couch for free, it will save you a lot of money.

This posting is somewhat of a companion article to one of my previous articles about how to get rid of a mattress for free.  This couch was left over from when I asked my Section 8 tenant to leave.

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April – May 2015 Rental Cash Flow

packs-163497_1280-PDThe rental cash flow was a solid as ever.  All of the 25 rents were all collected and deposited mostly by the third of the month, again.  It is a rather boring record, but if you have ever been a landlord, you know this is a great achievement.  I did have one rent that arrived on the 5th due to a bill-pay error?, and a $225 partial rent paid for the remaining sum owed on the 8th.  The bill-pay error was more due to forgetfulness, than an error.  These are solid tenants that are moving out to buy a home, so they have plenty of money.

So here are some of the cash flow highlights of the past several weeks…

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Tenant Damage vs. Wear and Tear => Case Study

Broken WindowTenant Damage vs. Wear and Tear or “The case of the Broken Window”

I just had an incident where one of my renters caused damage to another building I own.  I own 20 condominiums in a complex, it is high density housing.  Formerly a Class D neighborhood, which I was able to turn around.

Now that the neighborhood is safe to be outside in, the parents want to keep it that way.  They can bring their small children to the park, and not have to worry about fights or drug deals going on.  It is not to say that kids always behave, but if you keep on top of things, they do not get out of hand.

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Tenant Deposits, How to Reduce Risk

hand-holding-a-grenade-1411373825Xtf-PDTenant deposits are one of your keys to risk mitigation.

If you are like most landlords, you think that the largest risk to being a landlord is getting your rent.  You know that deposits will protect you, and if you are calculating your numbers correctly, you will make a big profit.

Make no mistake, if you think all you need is a deposit to protect you, you will be headed for disaster.

The number one way to protect your income stream from tenant defaults is to get great tenants to begin with. Good tenants will bring in a solid income of at least 3.5x the rent in income. Preferably much more. With the average family income over $50K annually, just getting an average income will probably be well over 3.5x the rent in income.

Income will tell you the tenant’s ability to pay rent.

The second piece of the puzzle is credit score. With a C-grade credit score north of 620, and the average tenant’s credit score being north of 650, it is easy to weed out lower scoring tenants to reduce risk.

Why take the bottom of the barrel tenants in terms of credit score, and increase your risk? These people may be great people, and some will definitely pay rent, but it is a higher risk potential. Mitigate your risk by selecting a tenant who has proven their ability to stand behind their financial commitments.

Read more here

Do you have any interesting tenant deposit stories? What is your policy on deposits, or what have you experienced as a tenant?