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Property owners know that finding the right tenant for a rental property is a top priority. Putting up with bad tenants, like people who don't pay rent, trash the house or turn it into their personal pigsty, leads to income loss. You'll be stuck cleaning up their mess and paying for damages with a small chance of recovering past-due rental payments.
How much does it really cost to deal with a bad tenant? What can a property owner do to avoid these tenants before financial damage is done? Keep reading to learn one of the best reasons to hire a Palm Desert property management company. Hint: it's to benefit from a thorough tenant screening process!
The words "vacancy" and "eviction" fill the nightmares of many real estate investors. Successful rental properties are filled with responsible tenants who pay their bills. So, what does a bad tenant cost a landlord? Let's look at some of the ways that property managers say a bad tenant can cause problems that impact your bottom line.
Late or missed payments can significantly impact a property owner's financial stability. Cash flow difficulties, short-term unemployment, and quarrels over remodeling and maintenance are reasons tenants might withhold rent.
When a bad tenant pays only a partial amount of the monthly rent or consistently pays late, property owners deal with excuses that pile up for the late payment. When bad renters say they'll "catch up as soon as possible," that simply buys more time (and leads to more late payments). Months without rent pain in full becomes a costly problem for investors.
Lease regulations are in place to protect a real estate investor, their property, and their reputation. A tenant who constantly hosts loud parties, hoards trash and boxes, and destroys property is a drain on your time and resources. Breaking rules can even affect a landlord's ability to find good renters in the future if a property becomes an eyesore.
Bad tenants frequently cause property damage, resulting in significant expenses for a property owner to get the rental unit back into liveable condition. When the damage done to a property is more than any security deposit will cover, the remaining expenses will have to come from a property owner's pocket.
In less extreme cases, a tenant can trash a rental property by leaving a dirty kitchen, destroying carpet, or leaving a giant pile of trash in the garage. Removing the trash and deeper-than-usual cleaning becomes an extra expense for property owners and slows down the turnaround time for finding a new renter.
Bad renters also become a problem when engaging in illicit activities in the property, such as using or selling illegal substances and various criminal actions that can attract undesirable and unwanted visitors. In some cases, a landlord can be held responsible when a tenant commits a crime on the property.
A bad tenant can be a nuisance to an entire neighborhood. They can cause problems and frustration for other homeowners within the area. A property owner might face threats from the HOA or nearby homeowners that could hamper future efforts to rent the house. A company that offers professional property management services can help with difficult tenants and repair your reputation in the neighborhood as a good property owner.
Vacancy rates are an essential metric that landlords need to be aware of. When bad tenants destroy a rental unit, it takes longer to go through the make-ready process so a new renter can move in. Vacant rental properties mean no money is coming in! Without steady rental income, investors don't have the cash flow to keep up with ongoing operating expenses.
When you run out of ways to encourage bad renters to follow the rules, it's time to evict them. The eviction process can take several weeks to work through the court system while you continue losing money. Plus, there are attorney fees, court costs, document server costs, and more.
As you can see, a bad tenant can severely impact your property and income, from leaving you with significant damage to not paying rent. If you've ever wondered "what does a property manager do," they help real estate investors avoid bad tenants and the costly problems that come along with them! A Palm Desert property manager applies a thorough tenant screening process to place better renters, then manager residents to ensure on-time rent collection and rule enforcement.
McLean Company delivers professional property management services to help Palm Springs landlords experience better renters and returns! Let's talk soon about how we can help.
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