How to Avoid Bad TenantsYou hear so many horror stories about bad tenants, right? They trash the place, leave bills unpaid, harass the neighbourhood, and so on. It’s almost enough to put you off property investing… If you don’t know how to avoid them. The good news is that you can pretty much totally avoid getting bad tenants ever again. And in the event that you DO get some despite all of your best efforts, a couple of extra measures will ensure you don’t lose out too much. So here are my top tips to avoiding getting sunk by bad tenants. 1. Buy in the Middle of the Market First of all, make sure you buy in the middle-of-the-market. That means avoiding lower-end, cheaper properties, as well as the higher end properties. The middle tends to be a safer bet if you want to avoid bad tenants. Here’s why… I can say this from experience, as I myself have come from a very low socio-economic area: bad people are usually poor people, but poor people are usually good people. It’s not whether you have money that makes you good or bad, but if you’re a bad person (and therefore a bad tenant), you don’t tend to have much money. Here’s how that works… bad people have a lack of respect for authority and for other people’s possessions. They are the types of people who don’t comply with leases and cause problems for landlords. These people are usually too poor to afford the middle of the market because these qualities are going to affect other aspects of their life, like their employment. You’ll also need to be careful that you don’t rent your property to multiple people. This is inviting bad tenants, because really, what you’ve got is the lower end of the market pooling their resources to live in the middle of the market. Ideally, you want a family, because they’re stable. They look after your property and are long-term renters because they don’t tend to make big moves or changes with children in the picture. So, if you buy houses in the middle of the market, and focus on getting families to rent them, you’re going to automatically disqualify most of the potential bad tenants. 2. Get a Great Rental Manager Once you’ve selected that property, it’s time to look for a great rental manager within that local area. So… what makes a great rental manager?
- Ideally, they own their own property so that they treat your property with respect and see things from your point of view as a fellow landlord.
- The radio of properties to rental managers within the company should be about 150. Any more than that might force them to cut corners (i.e. do fewer inspections).
- Always be polite and courteous
- Always show that you are grateful
- Send them a Christmas gift or remember them on other special occasions