There are plenty of benefits that come with investing in rental properties and becoming a landlord. Not only do you (hopefully) enjoy the perks of an appreciating asset, but you also acquire some extra monthly cash flow and learn what it’s like to make money with real estate.
However, landlording is far from the easy and effortless job that many would like you to think it is. It’s difficult, stressful, time-consuming, and – at times – gut-wrenching. If you’re in the business for any period of time at all, you’re going to eventually deal with some of the following issues and problems.
Late Rent Payment
Good tenant screening processes will help you avoid putting deadbeats in your properties, but it doesn’t solve every issue. Sometimes even the best tenant falls on hard times and, halfway through their lease, suddenly can’t pay rent.
When you have a rude and combative tenant, it’s fairly easy to go after them and start the eviction process. (Typically, this is enough to get them to fork over the money.) The more problematic scenario is when you have a good, well-intentioned tenant who is going through a rough patch. You don’t want to throw them out on the streets, but you’re running a business – not a charity.
The key is to have a clear lease agreement and be firm with your rules. The moment you let a tenant pay rent a day late without consequence, they gain the upper hand in the relationship. Stick to your guns early on and it will be easier to take action later.
Late rent payments are between you and the tenant. However, there are times when other people will get involved. For example, landlords often have to mediate issues with neighbors.
As we’ve discussed on this blog before, rental properties come with a legal covenant known as the right to quiet enjoyment. This covenant states that the tenant’s lease entitles them to certain rights that make life peaceful and private – such as reasonable privacy, freedom from disturbances, exclusive possession of the property, and use of common areas without interference.
If one of your tenants believes a next-door neighbor is violating their right to quiet enjoyment, they’re going to call you and request the situation be handled – regardless of whether the neighbor is one of your tenants or not. On the flip side, don’t be surprised if a neighbor contacts you one day to complain about your tenant.
“In some cases, complaints also come from the local police department and city hall, which issue fines to property owners for code violations such as failure to cut grass to maximum height,” Ron White writes for SF Gate. “Code violations often result in fines, and those fines ordinarily are charged to the landlord rather than to the tenants.”
Situations like these will really test you. You need to know what you’re going to do before you find yourself in a position like this. Otherwise, you’ll find it challenging to take a stance.
If you’re a landlord long enough, you’ll interact with a variety of tenants. One of the more common stereotypes is the “helpless tenant.”
Helpless tenants are the people who call you every single time they have a problem. Not just when there’s a big problem – like the water heater stops working – but also when there’s a tiny problem – like a roach in the kitchen or a simple clogged toilet.
Helpless tenants are frustrating because they make everything seem like a big deal. Whereas most tenants will handle these problems on their own, they don’t seem capable of doing anything without first involving you in the situation.
The key is to find a way to help your tenants when they really do need assistance, while not enabling behavior that you know is foolish or unreasonable. Strict lease agreements help in this area.
There’s a reason you collect a security deposit when a tenant moves in. There’s almost always going to be some wear and tear at the end of a lease; you should expect to patch a couple of drywall holes, pay for a cleaning service, and fix small plumbing issues. But you’ll occasionally run across a situation where there’s rather extensive property damage to your house.
Once the property damage is done, you’re pretty much out of luck. While you can certainly use the security deposit, it may not pay for everything. In these scenarios, prevention is the best method. By inspecting the property periodically throughout the lease, you can hold tenants accountable and significantly reduce the risk of extensive damage.
Overwhelming Stress and Anxiety
There will be periods of time where money comes in and everything seems to be running like a well-oiled machine. Then there will be moments, like the ones discussed in this article, which lead to feelings of overwhelming stress and anxiety.
The good news is that you don’t have to deal with all of these issues and problems on your own. With a professional property management service, you can pay someone to take care of these issues while you focus on the big picture.
Green Residential: Houston’s Property Management Leader
As with any job, there are plenty of pros and cons to being a landlord. While it’s easy to focus on the benefits and ignore the negatives, this ultimately does prospective landlords a disservice. If you want a full and accurate picture of what it’s like to invest in rental properties, you need to be equally aware of the good, bad, and ugly.
At Green Residential, it’s our goal to help clients manage the challenging aspects that come with being a landlord. From property marketing and tenant screening to rent collection and even evictions, we can handle it all. Contact us today to get started!