Not every landlord is familiar with the term “professional tenants.” At first, it may not sound terrible, but it only takes one encounter with one of these individuals to change your mind forever. A professional tenant can quickly become a landlord’s worst nightmare, damaging both the property itself and profits. Continue reading as we help define how to spot professional tenants and, most importantly, how to avoid them!
What is a Professional Tenant?
A professional tenant or professional renter knows and uses legal loopholes in the system to their advantage. This is the kind of renter who offers landlords only heartache and headaches. They will find a way to withhold rent for repairs, complain about everything, drag out evictions, and ultimately leave you high and dry holding the bill.
5 Ways Professional Tenants Hurt Property Owners
Professional tenants are known for their ability to cheat the system. That said, to get away with incidents of damage, complaints, and missing rent, these tenants have come up with some common tactics. Check out these top 5 loopholes professional tenants use against landlords.
- Withholding Rent for Repairs
- Cash Payments and Fake Receipts
- Only Paying Partial Rent
- Tugging on Heartstrings
- Leveraging Late Fees
Withholding Rent for Repairs
Some professional tenants use maintenance and habitability claims to break a lease and avoid paying rent. Unfortunately, landlords cannot stop a tenant from making these claims. However, there are steps every property owner can take to fight such a bogus claim. Check out these tips below –
- Provide tenants with written instructions on how to report maintenance needs.
- Document all repair requests
- Address maintenance concerns promptly
- Save invoices of repairs and request photos of completed work from vendors or maintenance techs.
Cash Payments and Fake Receipts
Professional tenants love paying in cash, and the reason is simple, little to no records. Accepting cash opens up the possibility of tenants disputing amounts received or creating fraudulent receipts. Therefore, avoid the hassle and do not accept cash payment of any kind. If the tenant insists on not using a credit/debit card or ACH withdrawal, request that they provide a money order instead of cash. Money orders provide trackable receipts and a record of the payment that can help in avoiding disputes.
Only Paying Partial Rent
Delaying rent payments is one of the most common and detrimental tactics professional tenants use. For example, most states will not allow a tenant to file an eviction if the tenant has made an effort to pay rent and the landlord accepts partial payment. Therefore, the best way to combat this is not to accept partial payments. So, stick to the lease where the full rent is due within the grace period and be prepared to start eviction proceedings if the rent is not paid in full.
Tugging on Heartstrings
Everyone has a story, and professional tenants have one for every occasion, including when it is time to pay rent. A generous owner may be apt to give the tenant leniency when hearing their sob story. However, this sets a dangerous precedent that professional renters will extort to their advantage. Remember, the landlord-tenant relationship must remain professional at all times. While the story may tug on your heartstrings, landlords must draw a hard line with the rent payments. This is the only way to keep things fair amongst all tenants, avoid claims of favoritism, and motivate tenants to pay on time or face eviction.
Leveraging Late Fees
Many lease agreements incorporate a grace period into the rental clause. For example, rent is due in full on the first of each month with a 5 day grace period. Then, on the 6th day, if the rent remains unpaid, the tenant will be assessed a late fee, and the landlord will begin eviction proceedings. However, professional tenants know how to navigate this system to avoid paying late fees. Typically, they will pay the rent late and tell owners that the late fees are “on the way.” Since the landlord accepted the rent, filing for eviction is now a waiting game until next month. Professional tenants can keep this game going for months. So, never waive the late fee and ensure the tenant pays the rent and fees in full.
How Do You Spot a Professional Tenant?
One problem with professional tenants is they have a knack for hiding their poor and often sporadic rental history from prospective landlords. Therefore, it can be a challenge to pick them out from the stack of applications immediately. So, careful and comprehensive screening is critical for spotting these issues early. Let’s review some common professional tenant red flags below –
Warning Signs of a Professional Renter
- Unexplained gaps in residential history
- History of evictions
- A pattern of breaking multiple lease agreements
- Pending or previous litigation involving former landlords
- A pattern of delinquent payments
- Financial history shows poor credit rating, collections accounts, or previous judgments.
- Non-verifiable or fake references
- Boastful behavior regarding real estate or legal knowledge
Generally speaking, an applicant with one of the more minor issues above may not be a threat. For example, a young college student may show several moves in only a few years, while a divorcing couple may be dealing with the aftermath of bankruptcy. In these instances, the discoveries made during the screening process could have a simple explanation.
That said, it is the applicant with multiple red flags and no viable reason that should send landlords running the other way. After all, if a tenant shows a pattern of this type of behavior, why would it not continue at your property? So, the more strikes against them, the more likely you are dealing with a professional tenant.
Screening Tips for Avoiding Professional Renters
A landlord’s best defense against troublesome tenants is implementing thorough screening and standard qualifications. While these processes require more time and effort initially, it is well worth it in the long run. Keep in mind, evicting a professional tenant is an arduous process. So, if you can identify and deny them in the application process, you will save many headaches. Check out these screening tips below –
- Income Verification – It is important to verify an applicant’s work history to determine whether they can afford the monthly rent. Generally, most landlords agree an applicant should have 3 times the monthly rent in gross income to cover rent and their expenses. That said, always call the employer and verify the information provided n a paystub or tax document.
- Credit Worthiness – Reviewing an applicant’s credit goes beyond just considering the overall score. Instead, look for delinquent accounts, judgments, late payment history, bankruptcies, or evictions.
- Criminal Background – When checking into an applicant’s criminal background, look for violent crimes or a history of drug offenses. After all, the last thing you want is your rental property to be a home base for illegal activity.
- Rental History – Talk to the applicant and look for a plausible explanation for any gaps in their rental history. Tenants who skip from property to property could present a red flag.
- References – Request that every applicant provide contact information for their prior landlords. Then, take the time to call and verify each reference. Ask the previous landlord about payment history, unit condition, complaints, and most importantly, would they ever rent to the tenant again? Contacting each reference will also reveal if the information the applicant provided is legitimate or fake.
When screening and communicating with tenants, owners must follow all Fair Housing Laws. These laws protect applicants and tenants from unfair housing discrimination. Therefore, landlords cannot discriminate against tenants for any of the following reasons, known as “protected classes” –
- National Origin
- Marital Status
- Familial Status
- Sexual Orientation
- Gender Identity
Accusations of discrimination are detrimental and potentially devastating to landlords. So, familiarize yourself with the protected classes in your area and keep copies of all documentation.
How to Get Rid of a Professional Tenant
Getting a tenant to leave either through eviction or other means is not easy. However, if you find yourself stuck with a professional tenant wreaking havoc on your property, consider the options below –
- Eviction – While no one wants to go through the costly and time-consuming eviction process, it may be the best route. That said, the eviction process requires landlords to follow a series of steps and adhere to all local laws. Furthermore, it requires meticulous record-keeping to prove your case in court. For more information on how landlords can navigate the eviction process, check out our blog.
Bonus Tip: It is easy to get frustrated and want to remove the tenant by any means necessary. However, landlords should never attempt what is known as a “self-help eviction.” These are not only illegal but potentially dangerous. Self-help evictions could mean intimidating the tenant, cutting off utilities to make the unit unlivable, or removing a tenant by force. That said, this actually gives the tenant greater legal standing, and it could end up costing the landlord even more while still not getting the tenant out. So, stick to the lawful eviction process.
- Cash for Keys – Another option is to incentivize the tenants to move on by using cash. While this can feel like admitting defeat, it is generally faster and cheaper than eviction. It is a good idea to consult an attorney before negotiating this type of agreement with a troublesome tenant. For more tips on how to get a tenant to move out without eviction, check out our blog.
Protect Yourself from Professional Tenants with Property Management
When it comes to protection methods against professional tenants, few options offer the security of professional property management. At Bay Property Management Group, we have seen it all. Our comprehensive screening process, legal lease, and diligent property manager follow-up help ensure the right fit is found for your rental property.
Furthermore, we offer a 6 Month Tenant Warranty, so if we place a tenant who is evicted within the first 6 months, we will re-rent your property for free! Plus, if an eviction does need to occur, the professionals at Bay Property Management Group stand with you to navigate every step of the process while keeping you well informed. So, if you are looking for investment property solutions, give us a call to see how full-service rental management could be the right choice for you.