Unfortunately many self-managing property owners are spending time worrying about their investments because of a conflict with their tenants, instead of enjoying quality time with loved ones – which is what property ownership is supposed to enable. This is where a property manager would have helped.
“They are worrying because their retirement assets are being compromised by tenants from hell and they have not partnered-up with a property manager,” says Brandon Sage of LandLord Property & Rental Management, Inc.
In the business there is a rare but destructive class of tenant from hell called a “professional tenant” that puts the owner in a special kind of hell, says Sage; not to be confused with the other “professional tenants” which are tenants that have professional jobs.
“Language is important in how we tackle problems and the widespread use of the term ‘professional tenant’ to describe is counter-productive,” he says. “We need to call these rare but destructive tenants that start a tenancy intent on exploitation what they are: ‘predator tenants.’ Landlords are their prey; but property managers are their nemesis.”
Predator tenants are those that do any combination of the following:
- Never intended to pay rent;
- Use the premises for illegal activity; and
- Fabricate cases for abatement of rent at every opportunity.
Predators look for vulnerable prey. They find them by looking for:
- Over-priced properties that signal a lack of awareness of the rental market by the landlord or agent;
- Long-vacant properties that signal an owner's desperation to get them rented;
- Poorly marketed properties that signal an owner's or agent's inexperience leasing; and
- Agent-listed properties that signal the involvement of an intermediary with limited experience screening
Predator tenants have a range of tactics they employ to get into units, says Sage. “They present themselves as a limited-time opportunity for the landlord to get high rent and a quality tenant,” he says, “stepping in with at- or above-asking offers for rent while demanding a quick turnaround on the application before they have to fly away on business to some far off place, thus limiting the chance for due diligence.”
They offer sob stories if it appears the landlord's good nature can be appealed-to, adds Sage, putting together attractive application packages that are too often accepted at face value but could be exposed as fraudulent with sufficient verification.
Predator tenants avoid property manager for the following reasons:
- Managers are not afraid to ask questions that predators want to avoid answering;
- Managers have heard all the stories predators have to tell;
- Managers are emotionally un-connected to the rental and able to approach screening objectively and concern themselves with the tenant they will have to manage every day of the tenancy; and
- Managers screen large volumes of applications and are therefore more experienced carrying-out due diligence
“Honest and reliable tenants are the cornerstone of a well-performing investment property and a property manager is an integral part of that,” says Sage. “When a predator tenant strikes, a manager can deal with him or her swiftly – and if they are doing their job properly, that predator will never come near the property in the first place.”
The saddest part of all this is how the predator tenant ruins it for tenants truly in need, says Sage.
“Their acts of exploitation have kept many being landlords, driven more out of the business and made many of those still in it less open to helping tenants in need,” he says. “The current regulatory framework gives cover to predator tenants and that has to change before we can see truly positive change.”
You are settling down to dive into the Thanksgiving turkey and your phone rings. It is your tenant and once again, something is wrong and you have to run out the door to deal with it – but this tenant hasn’t been paid in three months and the 4th eviction hearing is soon.