(This post is part of our “Landlord Basics” series, which seeks to help the new landlord / investor understand some of the basics of tenant relations and property management. Click here to view the entire Landlord Basics archive.)
From time to time as you purchase buildings, you may inherit tenants that come along with them. If a tenant is paying their rent on time every month and taking care of the property, this is a very good thing. However, if a tenant is not taking care of a property, it can cause issues down the line when that tenant moves out. Some of these tenants will pay rent on time every month, and never call with concerns. Others will make themselves more evident by either not paying rent, calling constantly, or both.
A tenant who is not paying rent should be evicted. This really shouldn’t come as a shock, since you purchased the property as an income property, and a tenant not paying rent is not generating income. This is the easy bas tenant decision to deal with.
A tenant who is paying but is not taking care of the property is another issue. This could be an issue as simple as not cleaning properly, or not taking care of the yard. Generally these tenants will respond to a formal letter requesting them to clean up their act. Over the course of several years, the “non-cleaning’ tenant could cause serious damage, such as mold build up.
However, some tenants do physical damage to the property. For instance, some will throw things into the walls and create holes. Another example would be a landlord story where the tenants knew they were being evicted the following day, so they removed both hot water tanks and both furnaces from their duplex (other unit was vacant), and sold them for scrap. The repairs can become very costly very quickly!
So, what do you do? Should you keep a bad tenant? If a tenant is causing physical harm or destruction to the property, an eviction could be in order. Catching them early in the destruction of the property will only SAVE you money on the inevitable rehab. However, if it is an issue of cleaning, it may be better to send a strongly worded letter or make an appearance to tell the tenant that things need to change, or they will be facing an eviction as well.