Finding great tenants is the correct path to profits for landlords. Unfortunately, the job doesn’t stop there. Continuing, active property management is crucial to avoiding income loss.
Recent reports of landlord-tenant disputes prove how easy it is to get off track.
For instance, a B.C. landlord made a common mistake. He allowed a tenant to move into a unit that had not been properly cleaned. To make matters worse, he did not meet the tenant at move-in or write up an inspection report.
Other missteps include:
Understating the cost of doing coin laundry;
Misrepresenting the condition of the unit in an ad;
Failing to bring the pool back into service;
Putting off fixing a broken window pane;
Neglecting a broken toilet; and
Not servicing the heater or hot water heater.
Having set the stage, it is not surprising that this landlord ended up in dispute resolution. Unfortunately, that can cost more than maintaining the property in the first place.
Here, the tenant won thousands of dollars, including $300 for his time spent cleaning, $200 a month in rent reductions before repairs were made, and an ongoing $100 per month rent abatement until the pool is fixed. That money could have been used to bring the property up to standards.
That doesn’t take into account the costs of defending the dispute, or the fact that the tenant now has the option of filing a judgement against the landlord, which could affect his credit. Imagine how these costs would spiral in multifamily properties if other tenants decide to get in on the action.
Similar cases, which have ended with landlords losing hundreds of dollars up front as well as reduced rent payments for the remainder of the lease term, have included issues like:
Broken water pipes;
Drywall and ceiling cracks; and
Any delay in resolving these tenant complaints cost money. The longer it takes to address the problem, the more frustrated the tenant becomes, and the more determined to seek retribution against the landlord who is demanding that rent be paid on time.
What’s worse, these tenants seek out others to fan the flames. The Internet and social media make it easy to smear a landlord’s reputation. It quickly becomes a vicious cycle: negative reviews scare away good tenants. As a result, the neglected property attracts problem tenants, who in turn cause more damage and more tenant complaints.
Well-managed properties, on the other hand, will make it easier to find the best tenants, who in turn will keep the property profitable.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.