How To Avoid Tenant Nightmares And Make Money

We've all heard the stories about some poor investor who bought a property that they shouldn't have. What they thought would have been a dream has become a nightmare because of difficult tenants.

You can make great money with the right rental properties. However, it's important to know how to avoid the tenant nightmares that can drive you crazy and eat away at your profits.

Managing rentals does not have to be difficult if you have the right systems and policies in place. Most nightmares can be avoided before you even purchase a property.

It may sound counter-intuitive, but one of the best ways to avoid problem tenants, is to buy a property that doesn't have any. You won't get the added benefit of getting the rental income from the first day, but what you gain is the ability to control the screening process of the tenants that will live there.

Here are some of the ways I have learned to deal with nightmare tenants in the past, and how you can avoid them:

1) Have a solid screening process in place for prospective tenants. Most problem tenants can be detected with a thorough review of the answers to the rent application, a credit report, past or pending lawsuits, and job history. For example, a tenant who is employed, but doesn't have pay stubs because they get paid in cash, is not someone you want in your residence. Cash payments can indicate unreliable or even illegal employment, which means your rent payments may be inconsistent.

2) Use a real estate agent that specializes in rentals. A real estate agent that specializes in rentals tends to attract higher quality tenants than you would otherwise find online through popular rental listing websites. They can also save you time by scheduling all apartment showings and doing much of the screening work for you. You still must review the documents they collect, but at least they are the ones to pull it all together for you.

3) Have a strong lease in place that clearly spells out all rules, expectations, and late fees. A tenant without a lease is a recipe for disaster. My lease covers everything from the requirement of pet deposits if you have a pet to the responsibility of the tenant to notify me within a certain amount of time if there are necessary repairs to be made.

Don't let the prospect of dealing with tenants keep you from building your wealth with real estate. When you have the proper systems and policies in place, you can avoid problem tenants and make a significant monthly income with rental properties.

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