February 21, 2017

The rental business can be pretty cutthroat, and if you go in unprepared, you’re probably going to end up getting burned. Here’s how you can protect yourself.

A bad renter is a landlord’s worst nightmare - and they can do a lot more damage to you than you can do to them.  If you ever plan to invest in a rental property, you need to understand that. It’s also imperative that you take into account what you can do to protect yourself.

That’s where we come in - today, we’re going to talk about some of the steps you can take as a landlord to protect yourself from a nightmare tenant.

Red Flags of a Bad Tenant

The first step in protecting yourself from a bad tenant is to avoid signing with them in the first place. See, there are certain red flags that they tend to share in common. I’d advise the following:

  • Run a thorough background check. Do they have a criminal record?
  • Contact every prior landlord they’ve dealt with. Do they have a history of damaging their properties or being late with rent?
  • Run a credit check. What sort of financial background do they have?
  • Take a look at their current place of residence. What condition is it in?
  • Verify their income. Do they actually have a job?

With that process behind you, here are a few other things to watch out for:

  • They’re pushy - they want to sign a lease in less than a week.
  • They’re currently living with relatives or in a motel
  • They owe money to the state - or worse, taxes to the IRS
  • They seem unlikely to follow your rules - maybe there’s cat hair on someone applying for a place that doesn’t permit pets, or the smell of smoke on someone applying for a no-smoking lease.
  • Their job history is unstable.
  • They aren’t on time for their appointment, or made a really bad first impression.
  • They look sloppy. Maybe they’ve just got poor personal grooming, or maybe their car is in bad shape - think about what that says about how they’ll treat your property.
  • They don’t care about seeing the unit before moving in.
  • They’re bandying cash about.
  • They have nothing but bad things to say about their current landlord.
  • They move frequently - so much so that it’s unusual.

The Importance of a Good Lease Agreement

Once you’ve figured out how to recognize that a tenant’s a dud, you’re going to want to draft up an ironclad lease. Because some of the worst tenants are pretty skilled at making you believe they aren’t terrible at all. I’d advise working with a lawyer to draft something up, but in broad strokes, your lease should cover the following:

  • The beginning and ending date of the lease
  • Renewal terms
  • Security deposits for factors such as first and last month’s rent, pet damages, etc.
  • Whether or not you’ll allow pets.
  • What the property will be used for
  • Terms involving notice to vacate
  • Right of entry: the tenant has a right to privacy, but you also have a right to inspection

Learn To Take a Hardline Approach

Some people will take a mile if you give them even an inch. For that reason, you need to learn to be assertive as a landlord. If you aren’t, you should probably just step back into the role of property owner and hire someone to be assertive for you.

You need to be strict, but fair.

Understanding the Eviction Process

So, let’s say you’ve done all of the above, but you still run into huge issues with your tenant. At that point, you might have no choice but to evict them. You can see a detailed description of the eviction process in Texas here. Give the tenant notice three to thirty days before you file for eviction to give them time to vacate.

Closing Thoughts

Tenants can make a landlord’s life a living nightmare. Knowing how to avoid the worst of them goes a long way towards preventing that from happening. Follow the advice here, and you will.

Armando Montelongo, Jr. is a real estate mogul, mentor, philanthropist, and speaker. As the CEO of Armando Montelongo Companies, he specializes in real estate investing and teaching his students how to strategically invest in residential and commercial real estate. Through these courses, he helps students positively transform their lives.

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