The Price of a Bad Tenant
February 1, 2001
Go ahead, keep that bad tenant. You know, the one who pays the rent when he feels like it, the one who has the wild parties where the police come, the one who punches holes in walls and only takes the garbage out when the mood strikes him – about once a month. Go ahead and keep him. Here’s what you have to look forward to.
First, because you don’t get regular rent payments, just promises, your cash flow is a disaster. Lack of rent from that unit, depending on the size of the property, could even mean that your profit is gone. What’s more, you have limited money for repairs and maintenance.
The other tenants (the good ones), what with the wild parties and the lack of maintenance, move out.
The property looks so bad and gets such a sordid reputation that good tenants don’t apply to live there. Before long you have to either let units sit vacant or rent to marginal tenants. Since you aren’t getting much rent from the bad tenant, your income will drop to just about zero if units sit vacant. In desperation, you begin to rent to marginal tenants.
Now with all those marginal tenants, every weekend is one big party. Some of them turn out to be even a couple of limbs below marginal on the evolutionary tree. They sell drugs out of the property. Even worse, one is a methamphetamine cook.
Before long the police raid the place. In the process of the raid, they knock down the door of one of the units while they are hauling off bad guys. The meth cook takes the hint and moves out in the middle of the night leaving a toxic mess that will cost you thousands of dollars to clean up.
Your property looks horrible, is uninhabitable because of the methamphetamine poisoning, and the cancer of your property infects the rest of the neighborhood. Property values fall like a rock and the value of your property, even if you cleaned up the methamphetamine poison, is less than you paid for it.
All because you kept a bad tenant.
Is this an exaggeration? Only a slight one. This is the story of the death of too many neighborhoods. The decline starts with one bad tenant, and continues because one landlord wouldn’t do a proper job. He doesn’t get rid of a bad tenant because either he felt sorry for him or her, couldn’t decide what to do, or was afraid to act for one or more reasons.
In most places in the country all you need to get rid of a tenant is a no-cause, 30-day notice. In some places it’s as little as 10 days. Make sure you know what the law is in your state or locality. You don’t even need to do a formal eviction, just terminate the tenancy. Most likely they’ll move.
Being a businesslike landlord means you bite the bullet and get rid of bad tenants. You don’t keep them around to eat up your profits, drive off your good tenants, destroy your property and threaten your neighborhood.