2/13/24

Check out part of the first chapter of my property management book.

WHAT IS A PROFESSIONAL TENANT

A pain in the ass, sleep draining, money draining, chest pain causing, anxiety causing, pain in the ass!

That's it, the best way to describe them. Now let's go into further details. Professional tenants are not good tenants that pay their rent on time, take care of your place and tell you the second something is wrong. Some of them are not actually looking for a place to live, they are just looking for a landlord to sue and get some money! If they are looking for a place to rent, they try to find as many ways possible to not pay you rent, never tell you when things are wrong when they are supposed to, and threaten to sue at every given chance. They also sometimes claim fair housing violations under many different forms. They are called professionals because they are very good at what they do. They mostly prey on for rent by owner listings, because they know that there is a higher chance of getting away with it. Now that is not saying that owners can not or are incapable of managing their properties well. BUT when a professional tenant looks for their next SCORE they mostly never bother calling a listing that is represented by a property management company. They know that we do not put up with the BS.

Some of the tactics:

• Try to get verbal contracts
• Either the main one or addons
• Exchange rent for services supposedly performed by them
• Repairs, cleaning, yard work, or upgrades
• Ask many different questions to try and trip you up on fair housing so they can sue for $$$$$
• Break in, change the locks and claim they have a legitimate lease and produce one that they either made themselves or someone else
• Start claiming things are broken and withhold rent till you fix them but never have time to let someone in to fix them.
• Break things to start making the claims above
• Find a city or state that is anti-landlord and let them stay there and avoid eviction if they have a child, have covid, have a service animal, lose a job and all other sorts of things

We have had many people call us in the past with a professional tenant in place. If we can help, we sign the owner up and get busy eradicating the problem.

VERBAL CONTRACTS

They will call or text you to see the property and literally start on the phone trying to catch you with a verbal contract! Some examples:

“If I see it today and pay some money, can I move in tomorrow?”

They drive by it SEE IT or you show it to them, they then mail you some cash or check for the background check then gain entry to the property by breaking in or hiring a locksmith and move in! Then you show up and they are like “you said I could move in after I see it and pay you some money.” Now you have to try and get the courts to get them out.

“I am good with landscaping, after I move in can we work out a deal where I do yard work for rent?”

You go through the processes, they move in and they start not paying the full price for rent, or none at all because they pulled some weeds, or mowed the grass, or trimmed some bushes and are claiming “You said I could trade yardwork for rent.” Good luck getting them out!

“Sometimes my family stays, some nights.”

You go by and see 6 cars parked all over the yard. They have 12 people now living there. “I let you know that my family might be staying with me.” Again got to fight that one in court.

They will call or text you to circumnavigate the use of a property manager. They might say things like, “You could not use a property manager, I would deposit the funds directly into your account. This would save you XXXX so much per month. We could split the difference. This would be a win win! I'm a great tenant, I have paid my rent on time for x number of years just call my past friend….. I mean landlord (wink, wink) here is their number they will vouch for me.”

They sometimes can see that you are working with a property manager, but will get your phone number and contact you directly with questions, excuses and other things to try and catch you in a violation. If you have a property manager, DO NOT RESPOND TO ANY CONTACT ATTEMPTS BY THE TENANT, pass them on to the property manager. They are in place to help you avoid court, lost funds, headaches and heart wrenching excuses. Now the only time you would work with the tenant directly is if your property manager is missing and you can not get ahold of them. Here is a script you can use when a current tenant or possible new tenant tries to contact you. “Thank you for bringing me your concerns/questions/comments/repair requests, however I have hired a property manager to professionally manage my property. Any contact/concerns/questions/comments/repair requests should be directed to the Property Management Company “XXXXXXXXXX” their phone number is XXXXXXXXXX. The information you gave me WILL NOT BE FORWARDED to the property management company. You must contact them with your /concerns/questions/comments/repair requests. You will not receive any further responses from me.”

This basically puts them on notice that you are not going to mess around with professional tenants.

ALWAYS and I MEAN ALWAYS state ALL CONTRACTS ARE TO BE IN WRITING. Put it in your ad, put it on your flyers, put it on your phone message, put it on the photos you post on the internet, and mention it in EVERY conversation. If you have a property manager they would handle everything being in writing.

EXCHANGING SERVICES FOR RENT

No JUST No.. This has ended badly almost every time that I have seen it. First they try to get the verbal contract, but if you do get it in writing, how are you supposed to confirm that the work was done in a timely professional manner? 

Then things ALWAYS start to pop up. And its never them letting you know what's broken then asking to negotiate. It started with some missing rent and a note, X,Y or Z was not working, I fixed it, would have been $200 if a handyman did it, I only charged half, I took $100 of the rent. No receipts, no pictures. Or they will provide a receipt but never install what they bought, send you a pic of the receipt then, return the item to the store. Then if they get away with that, they start to get more bold, oh you had a dishwasher stop working for $150, the ceiling fan needed replacing $250, all the plumbing was backed up $300, oh you had a roof leak $1000 and so on.

JUST SAY NO.

FAIR HOUSING

Read your state's Fair Housing Law, Read the Federal Government's Fair Housing Law, then read each 5 more times to get it to sink in. This is one of the most litigated things that happen in real estate. Then update yourself at least every two years, and get access to new changes to Fair Housing Law.

Professional tenants might say something like, “Is this a safe neighborhood?” They have kids with them and you answer “Yea it's safe but there is no fenced yard so it might not be good for kids if you want to let them out.” Possible Fair Housing Violation. “The owner discriminated against me because I have kids and said the property was not good for kids!”

Or you put in your marketing “No dogs allowed!” Possible Fair Housing Violation. “They said I could not have my service animal!” YEP it happens a lot.

OR

“I don't speak XXXX language very well, are the neighbors XXXX?” You respond because you personally know the neighbors, “Nope the neighbors are not XXXXX, so you dont have to worry about speaking XXXXX!” Then you're getting notified that you are in trouble for violating Fair Housing because you made it seem bad that it would be a problem if they spoke XXXXX!

So re-read the first 3 sentences of this section.

EXCUSES

They are great at coming up with every excuse under the sun, moon, stars and occasionally an eclipse! When you self manage, you will be bombarded with many different excuses. They mostly are to give a reason why they have not paid rent yet. But sometimes they start prior to when they move in.

Sometimes they miss the showing appointment, the move-in walkthrough, the paperwork deadline, the funds delivered deadline, the background check deadline and so on. Most of the time if they are renting from you already they give you an excuse for not paying the rent because they actually do not have enough money to pay the rent. They will say things like “I could not get of work in time to make it to the bank.”, “I am out of town for xyx. Will pay when I get back.” “I was at the hospital with or for xyz.” “My employer's payment to me did not go through.” “I mailed a check and it came back to me.” and so on.

If they are not tenants yet, they usually drag their feet because either they do not have the funds to move in yet, no funds for background checks, or they can not get out of their lease yet. All this does is stop you from making the funds you deserve to be making with your investment property.

If they are your tenant already and they keep making excuses to why you can not enter the property for an inspection or repairs, it may be do to either they have to many people living there, the place has extensive damage, the place is excessively dirty, 

Some of these excuses are legitimate and sometimes they are not. If you are going to self manage, you have to put on your thick shell and let ALL of them bounce off of you. Whatever excuse that they have, listen to it, show empathy (without claiming fault) if needed, then respond with something along the lines of “Ok, when will you have the $$$$ or when would you like to reschedule for, or when will you have the docs signed? You can not let the excuse change your decision making process or the Professional tenant may have won. Also if you change your decision based on this situation, you would then have to do it the same for EVERYONE going forward with the same situation. If you are too nice of a person, maybe you should hire a property management company to shield you from all of it like a viking shield wall! Tell your manager “I do not want to hear any of the reasons, they make me sad, just let me know when xyz is claimed to be happening.”

IF you get too many excuses prior to them becoming a tenant, see this as a major RED FLAG, pass on them as being a tenant and understand that you may have just protected yourself from a world of hurt. 

IF they are already your tenant and you start to get a bunch of excuses

WITHHOLDING RENT UNTIL THINGS ARE FIXED

We hear this one from many depressed self managed owners that say “They haven't paid rent for 6 months. They claim that they do not have to because this or that is broken and I have not fixed it yet.” First and foremost KNOW YOUR STATES LAWS ON RENTALS, LANDLORD AND TENANT RIGHTS. In AZ the tenant is not allowed to withhold rent unless they have first given proper written notice to have the owner fix it. Then be available for the owner to fix it or have someone fix it and not block access to the property. After the time frame for the written notice passes and the owner has not fixed it, the tenant can do self repair and submit receipts (actual receipts not handwritten) up to $300 as of this writing. Or the tenant could then end the lease due to the landlord's breach of contract. BUT the tenant can not live there and not pay rent. If the tenant lives in your property they HAVE to pay rent and handle the repairs or lack thereof separately.............