5 Types of Bad Tenants
As a landlord, I've encountered different types of bad tenants. Each type has their own unique set of problems, and it's important to know how to handle them effectively.
The Haggler
These tenants are known for haggling over everything and getting into arguments with landlords over petty things in an attempt to obtain rent discounts. To deal with hagglers, it's important to set clear boundaries and stick to them. Communicate your rental rates and policies clearly, and be firm in your decision-making. You should have all agreements in writing and you should stick to them. The haggler will repeatedly test boundaries, they may even use guilt tactics. I've had one tenant who'd volunteer to do small favors only to try to obtain discounts for them later.
The Promiser
These tenants always come up short on rent, but promise to pay the rest in a week. These weeks turn into months until you realize that you should just serve them with an eviction notice. To deal with promisers, you should have all policies and late fees documented in writing, just like with hagglers. Don't let them get away with breaking the terms of your lease, and be prepared to take legal action if necessary. You'd be surprised how quickly they can find cash when served with an official 14-day notice from the constable.
The Handyman
You often inherit this tenant from a previous landlord, usually on properties that are a little mismanaged. This tenant knows all the property flaws and initially seems like a lifesaver. He doesn't mind fixing things around the house, and doesn't ask for much, just a little discount on the rent. The problem is, this handyman tenant often lacks the right tools or knowledge to make proper repairs. They make mickey-mouse repairs that end up costing you more to repair again later. They will fix a water leak with ducttape, use parts they found in the nearby dumpster, and use your basement to store personal crap they looted from others. That's right, in addition to half-ass repairs, being an on-site handyman, they will often also abuse the extra privileges you've given them to treat common area as their own. Once again, do not agree to anything that's not in your lease, and do not let your tenants make repairs. You should have your own crew for this.
The Victim
This tenant has fallen on hard times due to "a recent event", but promises she'll get back on track in a month or so. She even has references who can confirm this event and her hardship. Problem is, every month there is a new event occurring that keeps setting her back. Eventually you find out that even the original event was not as recent as she claims, and she tends to stretch the truth quite a bit. Sometimes her story completely contradicts what you hear from others. She always has excuses and a sob story to go along with it. To the victim, you're either the sucker listening to her story or the villain she tells about to someone else. It's very easy to go from her seeing you as a friend to an enemy if you don't sympathize with her. This tenant is a ticking timebomb, it's only a matter of time until you become the villian. Nevertheless, be calm and stand your ground. If they fail to pay rent or to respect the rules, be prepared for an expensive eviction. The courts are full of these types of tenants and they often manage to get free representation from some volunteer law student based on a sob story they tell them. Don't expect the courts to be reasonable either, courts always give the tenant benefit of the doubt no matter how ridiculous the tenant's story is, at least if you're in a blue state.
The Professional Tenant
The fifth type of bad tenant is the most dangerous one: the professional tenant. This tenant has ascended past the first level of bad tenantship (I'm coining this term) and turned being a bad tenant into a profitable business. The fact that this tenant actually managed to monetize being an asshole (while many of us fail to monetize something of actual value) is an impressive achievement in itself. This tenant has the skillset to cause pain and harm to you in multiple ways. This tenant knows all local laws, legal loopholes, they will game the legal system to make your life hell, and the only way to get them to leave is to evict them or pay them to leave. They know this, and are more common in blue states.
To deal with professional tenants, you have to do everything by the book. Do not attempt to evict them without an attorney, as they will probably find a loophole to cause multiple delays. This tenant's goal is free rent and free money from you. They're effectivelly like a pest, but this pest has more rights than you do, despite you paying the mortgage. This tenant is often vengeful, causing damage to your property during the eviction process, illegally subletting, and filing frivilous complaints with the city (because these complaints often stall the eviction, regardless of their legitimacy). Be prepared for expensive repairs after they leave, that your puny 1-month-rent security deposit in Massachusetts won't cover. The best thing you can do is get them out quickly. Unfortunately, if you live in a place like Massachusetts or California, the cheapest way to get rid of them is to pay the tenant to leave voluntarily, often 2-3 months rent, because they have no incentive to move otherwise and courts don't care. This is why at Investomation we prefer to invest remotely, in states where landlords are not treated like witches at Salem Trials.
If it wasn't already clear, landlording isn't easy. You have to have systems in place outlining everything that can go wrong, you have to track your tenant communication in case something goes wrong, you have to have discipline and the know-how, you have to have a repair team, a property manager, and maybe even a lawyer so that you have more time to yourself. It's a hassle that's not for everyone. If this is something you choose to do, you should go to our education section to get more familiar with cashflowing real estate. And if you decide that you're more of a passive investor, you're welcome to invest with us, as we buy/build commercial real estate, manage it ourselves, and share the profits with our passive investors.