As I mentioned in my last post, I know a fellow landlord who just had a pretty bad experience with a tenant. Most, if not all of his problems could have avoided if he had just gone to the video store to rent a movie!

“What?”

Yes, believe it or not, most if not all of his problems could have been avoided if he had just watched the movie “Pacific Heights.”

Of course, I’m really (mostly) joking, but if you hear this story and then watch that movie, you’ll see some of the problems he could have avoided if he watched that movie as if it were a “landlord training video.” In fact, I recommend it to anyone interested in landlording. The story below is “almost” true, as I know it. I did have to modify some events and situations to protect identities. There were even more pitfalls for this landlord than even the unfortunate details that I divulge, but as you will see from this story, what I show you is enough of a learning experience.
My landlord friend purchased a nice house last fall. He thought it would be an adorable rental property for a nice family. He advertised it and within the week had several prospective tenants walk through. One guy seem very interested. He had a couple of kids and a girlfriend and really needed a place to live. The tenant was currently living in a motel, because his previous landlord had sold the house where he had lived. He was now searching for a new home to rent. He seemed like a nice person, and my landlord friend took this prospective tenant’s application.

Current residence checked out. Current job checked out. Salary checked out. Credit check showed he didn’t really have any credit to evaluate. The landlord called the tenant with the good news and the tenant agreed to the rent and the security deposit.

Well, my friend was thrilled! In less than two weeks after buying the house, he had it rented! With almost no repairs to make prior to the tenant moving in and almost no vacancy, this landlord was certainly ahead of the game! The tenant call them to ask if he could move in a week early, and the landlord agreed, subject to being paid the security deposit and first months rent up front.

Moving day: The landlord was supposed to meet the tenant at the house at noon, but the tenant called early and told him the moving truck was already there. He also told the landlord that he didn’t get paid until the end of that week, but could still pay half the security deposit and the first week’s rent. The next week, he promised, he could pay the balance of the security deposit and the full month’s rent for that month. Hesitantly, the well meaning landlord agreed. After all, the guy had already moved out of the motel and the moving truck was at the house! Moving day went smoothly otherwise…

The next week (Month #1): The tenant pays the rent for the month, as promised, but still can’t pay the security deposit. He promises that he “will have it soon.”

Month #2: Tenant is late with the rent by two weeks. Apparently, he was injured at work last month and is now on disability. He is waiting for the check. Rent is eventually paid… still no security deposit.

Month #3: The tenant is late, but promises the rent by the 15th. The 15th comes and goes. The tenant’s girlfriend calls on the 18th to note that there is no water in the house. The landlord tells the girlfriend he will send someone right over, and “by the way, do you have the rent for this month?” The girlfriend hangs up on the landlord! Later, the tenant (apparently in a drunken stupor) leaves a message on the landlord’s answering machine cursing him out and telling him “you’se ain’t gettin’ none of my money, OR the security deposit! Go [explicative] yourself!” The good landlord is now pretty concerned and apprehensive as to why the tenant is acting this way, but of course still sends a plumber over. The plumber finds that some of the water pipes have frozen and unfreezes them. He tells the tenants to leave a small trickle of water running in the tub to keep the water flowing during the cold weather to help avoid the problem in the future.

The next day: The tenant’s girlfriend calls the landlord to tell them that her boyfriend is in the hospital after falling and breaking a rib on the cast iron tub. The fall was supposedly caused by condensation on the bathroom floor, due to the plumber’s telling them to leave the water running. Oh, and by the way… the girlfriend informs the landlords her boyfriend intends to sue, since he was hurt on the landlord’s property!

At this point the landlord files eviction papers and eventually contacts an attorney for help. Two months later, after a lengthy process and significant time and energy, the tenant is finally evicted. At this point, the landlord is out three months rent, plus attorney and court costs, and is left with a house that is dirty and needs some minor repairs. In order to attempt to get the back rent owed to him, he would have to sue the tenant in civil court. Unfortunately, in the short term, the chance of getting the money owed is slim to none. As it so happens, unknown to the landlord, the tenant had been fired from their job about a month after he moved into the rental unit.

Fortunately, this story is pretty much over. So, what’s the Good, Bad, and Ugly.

The Good: The tenant was finally evicted. The house is still a good one. The landlord learned a valuable lesson early in his landlording career.

The Bad: The landlord could have done a lot to protect himself from the start. For example, he could have done a more thorough background check, even a criminal check. He could have called the previous landlord that the tenant had before he lived in the motel. (For that matter, why did the tenant go to a motel in the first place. Could it be that he had been EVICTED by the previous landlord too?) He could have filed for eviction as soon as five or ten days after the tenant initially didn’t pay his rent on time. The landlord could also have had stricter criteria that tenants have to meet in order to rent from him, and so on…

Most importantly, he should have never let the tenant move into his unit in the first place without the full security deposit and first month’s rent!

The Ugly: Everything mean and nasty the tenant did, and the time, energy, expense and mental anguish the well meaning landlord had to go through up to and including the eviction.

Granted, this is not an everyday occurrence for a landlord. Yes, it does happen. But I believe most tenants are good people. However, the stronger your tenant selection process is, and the more solid your policies and procedures are, the greater your chance of weeding out the bad prospective tenants and keeping the good ones!

Remember, there are many resources at www.ManageRentalProperty.com to help you build your landlord business better!

Until next time, happy landlording!

Regards,
Steven