If you own a lot of property you will have your good tenants and your bad tenants. But depending on how experienced you are, the criteria for these these tenants will be completely different.
When I first started buying property I thought that the “bad” tenants were the ones that wouldn’t leave me alone. They were the ones phoning me to report issues, ranging from plumbing problems to simple fixes. I would get frustrated that they weren’t doing the simplest things themselves and were relying on me and my company.
However, in time I learned that these were actually the better tenants. The ones who report a lot of issues and give me a lot of work may be time consuming, but they also tend to cause fewer problems in the long run. And most importantly, they cost me a lot less in the long run as well. There are two main reasons for this:
The Quiet Ones Are Letting the House Fall Apart
A house needs regular care and maintenance to make sure it doesn’t lose its value. If a problem is not fixed, it can have a snowball effect. In those early days of investing I assumed that tenants who were quiet didn’t have any problems. I later learned that many of them did have problems, but simply ignored them.
One of my tenants ignored a small plumbing issue in a second floor bathroom. This then grew into a problem with damp, which eventually resulted in most of the wall coming away and with a serious damp infestation. I didn’t discover this until after they had moved out, at which point I spent a tenth of the value of the house just putting things right.
Another tenant had a broken window. They had broken it, so they were too embarrassed to report it, maybe fearing that I would kick them out. They boarded it up, but did a bad job. The window was in a spare bedroom used for storage and rarely entered. Because of that, it never had any heating or AC and was left to the elements. The house was in a cold, wet climate and eventually damp took hold. It was so bad my first thought was that they had painted the walls black.
In the end, I lost everything I had ever made on that house and then some. It’s not just damp either. There are small issues that are ignored and go on to cause more problems. One tenant didn’t report an issue with the oven whereby the rubber sealing had come off. He didn’t think it was an issue, because without that sealing, a lot of hot air escaped during each cook and this gradually melted plastic counters and warped the wooden floor.
The Quiet Ones Might be up to Something
It sound suspicious I know, but sometimes it’s true. I have owned and rented over 100 houses in my time, many of which were sold on. In that time I have had three occasions where quiet tenants turned out to be slowly destroying my house and causing all kinds of issues.
One of them had a full LED lighting setup in the basement and was growing vast amounts of marijuana. There are a wide range of options for LED lighting and growing systems these days, and that guy had the lot. He was also a dealer who had basically turned the upper floor into a smoking room.
Another tenant went one step further and was cooking meth. The house was in a nice neighborhood and you would have never guessed, but this Walter White wannabe was experimenting with his health, his family’s life and my house. I found out after police were called following a small explosion in the basement. Luckily, the damage was minimal, but I had to drop the price to rent to locals who knew the house as the “Meth House”.
Another time, a house had been rented by a hoarder. He was an upstanding member of society when I leased the house to him, but there were apparently some underlying issues with drugs and mental illness. Within two years he was a hermit living in his own filth.
It was another 3 years before I got the house back. He had died, giving the firemen and emergency crew a very tough job of slaloming through the detritus to take him away. It was tragic and it wasn’t pleasant to see. It also cost me a lot of money, but I was more concerned with that fact that I had let it happen.
All the while I had allowed myself to think he was a good tenant because he was quiet. And all the while he had been suffering. That was the catalyst for me, the thing that forced me to change my mindset, both for the sake of their health and my bank balance. These days I make an effort to check the houses I own where possible, spotting all kinds of scams and illegalities and making sure my houses and tenants are intact.
