Bad tenants are toxic. They’re costly, infuriating, and spread like cockroaches. A property manager can spend thousands of dollars dealing with them.
Unfortunately, every property owner is familiar with the grief of unpaid rents, damage, and court and attorney expenses. They know the wasted time attached to the process.
What Makes for a Bad Tenant
Bad tenants aren’t necessarily unpleasant people. Often, they are individuals who have chosen to disregard the agreement made with property owners. They’re not paying their rent on time or at all. Neighbors complain about their behavior, or they sublet illegally. We’ve seen tenants file restraining orders against their landlords.
Whatever the issue, getting bad tenants out can cross any landlord’s desk. What can you do about it? Let’s take a look at ways to avoid and methods for getting rid of bad tenants. Here’s a guide to help.
Avoiding Bad Tenants
While hindsight is 20/20, the best way to avoid bad tenants is never to let them on your property in the first place.
Always Conduct a Background Check
You rent out a room in your house or lease out an apartment in your building, it makes sense to look at an applicant’s history. MobileHealth.net says 21% of DIY landlords don’t conduct background checks.
It may seem obvious, but you hand valuable assets over to a stranger when you don’t conduct a background check. You wouldn’t do that with your jewelry or money. You’d never give your car keys to an unknown stranger. So why would you choose to rent under those circumstances?
Even though a person seems nice, it is still essential to conduct a background check.
Get That Security Deposit
Never rent without a security deposit. Typically, this is three months’ worth of rent. It consists of the first month, last month’s rent, and secure funding. In some states, there are no size limits to the security deposit.
Anyone who argues with the security deposit is not the tenant you want. The deposit is a safeguard in case there’s damage. It also demonstrates a tenant’s sense of responsibility.
Avoid Cash Payments
People who offer cash are appealing. They offer cash upfront to cover rental periods. However, people who pay cash could be in trouble. We know of at least one landlord who took the cash and later found out his apartment was being used to process drugs. Other cash payers have a poor tenant history and try to stop you from finding out their background.
Have a Signed Lease
DIY landlords often rent without a lease. Bad tenants look for this. A lease outlines the terms and conditions of renting your property. It also covers financial responsibility, expected behavior, and the rental period. The lease also details what is expected of you as the landlord.
Not having this agreement increases the chance of disaster. It also leaves you with little legal documentation when there is a violation of the agreement by tenants.
Maintain Good Relationships
When it comes to getting bad tenants out, always do the right thing and do your best to keep relations with tenants respectful and cordial. If tenants have problems with the property, try to attend to them responsibly. Good interaction will make it easier to avoid complications which can lead to tension and ill will.
Rental Credit Checks
A rental credit can be part of a full background check, but a rental check focuses on a tenant’s financial history.
The candidate should have completed a rental application. On the form will be everything you need to conduct the check.
- Full name
- Date of birth
- Social security number
- Current address (and years they’ve lived there)
- Employment history
- Permission to run a credit check
While there are plenty of services that offer to perform a check, you can use one of the big three credit report services if you do it yourself.
- Equifax
- Experian
- TransUnion
To run a credit check on someone, you will need to confirm you’re the landlord of the property in question. Typically, researchers want the following information about you.
- Proof of identification (passport, driver’s license)
- Proof of residence (utility bill, mortgage statement, etc.)
- Proof of rental property ownership (mortgage or utility for the property with your name)
There will be a charge of $25 to $75 for each request. The fee can vary if you’re asking for, say, a full background report. Depending on the state, you can have the applicant pay that fee. Be sure to comply with local laws as some regions limit how much you can charge an applicant for a credit check. If out-of-pocket, you can absorb the expense yourself.
Criminal Records
Knowing if your tenant has a criminal history doesn’t necessarily mean they’re automatically ineligible. It does give you more information for making a decision. It tells you who they are and tells you the risks of renting to any particular individuals.
A good landlord considers the severity, nature, and timing of a crime and convictions on a case-by-case basis. Looking at criminal histories, you should also take into account HUD’s landlord counsel. It covers the consequence of taking a severe and adverse reaction to anyone’s criminal history.
Use an online tenant screening service. Most of the information you need to do the check will be on the tenant application. The process allows you to check records with the FBI, DEA, Homeland Security, law enforcement, and more.
Financial Income
Part of the rental process will include verifying income. Don’t take anyone at their word about their finances. Fudging numbers is common when a renter wants to get a rental. Landlords have a right to ask for documentation. Ask for pay stubs, bank statements, a W-2, or anything that confirms a steady income. It should prove that they can afford to meet your rental requirements.
Calculate the applicant’s debt-to-income ratio, this will provide you with a firm idea of your tenant’s minimum payments on a monthly debt against leftover income, this is an excellent financial reference point.
The last thing you can do is talk with previous landlords. You can ask about the timeliness of payments and any red flags you should be aware of.
Are They Moving Frequently?
One of the biggest red flags you can find about a tenant is the habit of changing addresses frequently. This doesn’t always mean a bad tenant, but a transitory prospect is not likely to spend a lot of time with you either.
You want to look for evictions and inability to pay rent. If you’re in the market for stability and steady income, this renter may not be the right choice.
Removing Bad Tenants from Your Property
The key to getting rid of bad tenants is to be tactful and smart. Here are some strategies for getting rid of a bad tenant.
Keep It Legal
Regardless of a renter’s worst behavior, getting bad tenants out means using legal means to remove them. Going the other way can cause more harm to you than good. Tenants have rights that can supersede yours if tenants can prove inappropriate actions on a landlord’s part.
Raise the Rent
Outside of a rent-controlled situation, you can raise the rent. You can only do this at the end of the lease. It could convince a bad tenant to move on, this option only holds up if the tenant isn’t seriously violating their lease. Conditions — including jurisdictional restrictions — minimize how much you can raise the rent.
Refuse to Renew the Lease
If no terms are forbidding it, you can simply tell the tenant you won’t negotiate their lease. You have to give notice of non-renewal inside of a legal window. Some tenants may be resistant, especially if they’ve been giving you problems. Be gracious as you can about letting them know they have to leave.
Threaten to Sue
If tenants are performing illegal acts, sternly inform them of the consequences if you find evidence. Have your lawyer draft a letter about your suspicions. The letter should include what will happen if tenants do not cease illegal activity or do not leave. The threat alone could give them the incentive to relocate.
Buy Your Bad Tenants Out
You could work through entire eviction proceedings, but Unfortunately, you’ll spend thousands of dollars and many hours navigating the eviction process in Idaho. Consider offering tenants a “settlement,” a sum to leave. Define specific terms for the move. (Evicted tenants almost always mean damage.) They don’t get their money until they’re gone and you’re satisfied with the property’s condition.
Last Thoughts
Accounting for the tips we’ve outlined above, you decrease the possibility of a bad tenant and increase your chances of getting rid of them.
None of this information is mutually exclusive. You can combine any number of strategies for getting bad tenants out. The one thing you should do is keep records, videos, or any other evidence you can get your hands on. Bad tenants do not go quietly into the good night without a fight!