Turn Trouble Tenants Into Dream Tenants

Got problem tenants? Try an approach that keeps your vacancy filled, your tenants happy, and your sanity intact.

March 3, 2014

If you’re renting out real estate, part of your job as a landlord is to trust your property to complete strangers. But there are concrete steps you can take to identify and solve common issues and protect your investment.

Where’s Your Trouble?

Start with identifying the issues. How are your tenants causing you stress? If you know what needs fixing, you can better apply solutions to the problems that plague your business.

Almost every landlord deals with the issue of late or missing rent payments at some point.But being a landlord means you’re an entrepreneur, which means you’re running a business. If you find yourself constantly hunting down rent checks from your tenants or if they consistently pay late or ask for leniency month-to-month, your business will suffer.

Similarly, when a renter decides to break or bend the terms you’ve agreed upon, this is a clear indication that your tenant has little regard for the requests and restrictions that protect your investment. For example, housing pets when the lease states that there can be no pets on the premises is breaking the lease agreement. The fact is that a rental lease is a legal agreement between the landlord and the tenant and letting these issues slide can turn into even bigger problems down the road.

Finally, phone calls at all hours of the night for every little leak or crack is a hallmark of an unsustainable tenant-landlord relationship. If you have a needy tenant with irrational complaints, trying to keep up with their demands can lead to burnout and frustration. Over time, the tension will build that could lead to a complete breakdown in communication.

Thankfully, there are solutions to the problems of late payments, property damage, disregard for the lease terms, and boundary issues. Your initial reaction might be to lash out and become the angry landlord with the wagging finger and the eviction threats. But that can easily make a big problem even worse. Instead, try these approaches, which will help keep your vacancy filled, your tenants happy, and your sanity intact.

Be Proactive

One of the best precautions you can take as a landlord is to pick your tenants carefully. Institute a thorough screening process at the outset, and you’ll avoid a fair share of headaches on the other side of the transaction.

The problem is, no matter how qualified tenants might seem during their screening, there is no guarantee they won’t end up causing you trouble down the road. To head this off, set clear expectations in the beginning. Be firm in your approach from day one and you’ll see a world of difference. Don’t excuse a late check here and there too quickly. Try not to bend the rules in one occasion or for one tenant because before you know it, you’ll be bending them for everyone.

Make It Easy to Pay Rent

If the problem is the collection of rent, there are ways to streamline the process and avoid the awkward hunt. Options can include ACH debit, where the tenant authorizes automatic withdrawals from their account on each rent payment day.

Or perhaps suggest online bill payment, where the tenant can add you to their list of recipients and pay you directly from their bank account. Many banks now offer this service for free.

Another option is collecting post-dated checks. Everyone can relax and know rent is taken care of without the awkwardness of asking or forgetting.

Know Your Agreements

Your lease is a legally binding document. Hopefully, most issues should never escalate to the courts. But when you’re trying to get your tenant to pay attention, refer to the terms in your lease. Leave your emotions out of it, maintain professionalism, and clearly highlight what part of the agreement the tenant is breaking. Give a firm warning that you will defend any action taken as recourse with the terms in the signed lease.

Not only does this send a clear message to your tenant that you are serious, but it also makes you less liable if things escalate. You have chosen to stick to the formalities rather than fly off the handle, so there’s no ambiguity to argue about.

Set Boundaries

When it comes to your time as a landlord or property owner, every minute is valuable. Especially if property management is not your full-time job, having tenants who believe you are at their beck and call can make you want to pull out your hair every time your phone rings.

Provide your tenants with a schedule that includes your availability. Set up auto-response e-mails that acknowledge or confirm you have received their message and indicate when they can expect a response (say, during regular business hours or within the next 24 hours). Most of the time, your tenants just want to know you’re on the case, not that you will come rushing over immediately.

Let Trust Flow Both Ways

Be sure to always follow through with what you say you’re going to do. Do things when you say you’re going to do them. Remember that the better you are as a trusted landlord, the more your tenants will want to treat you and your rental property with the utmost respect.

Play by the rules, stay professional, create processes, and use technology to tend to your tenants’ needs. Be honest and upfront, and your tenants will return the favor. If they see you as a dream landlord, you’ll soon see dividends. At the end of the day, turning trouble tenants into dream renters comes down to you and your approach to being a landlord.

Brenton Hayden is the founder and chairman of the board of Renters Warehouse. A Harvard Business School and MIT Sloan School of Business graduate, Brenton leads a team of over 140 employees and franchises in 21 states with a portfolio of managed properties valued at just under $1 billion.