Now that you've made your real estate investment—signing all the paperwork, clearing your loan with the bank, and completing necessary repairs and upgrades—it's time to focus on property management.
You're probably already familiar with many daily difficulties of managing a property. On top of keeping up with maintenance and rent collection, you must ensure that your tenants stay satisfied. This is key to your success as a landlord. And while tenants are great to have, they are not always easy to please or manage.
Fortunately, with experience (or this guide), you can anticipate some common tenant issues before they arise. Knowing what to expect—and how to effectively manage—landlord-tenant disputes will ensure that your real estate investment remains lucrative, your tenants stay satisfied, and your stress level remains low.
This article will discuss the top ten tenant disputes you can expect as a landlord and how to solve them proactively.
Whether avoiding conflicts before they arise or handling disagreements with or between tenants, the landlord must always maintain clear, consistent, and respectful communication.
In the lease agreement, you can sidestep common tenant issues before they occur by outlining expectations around noise, the right to habitability, and the right to a quiet environment. Then, when conflicts arise, you’ll point to previously signed paperwork to remind tenants of what they’ve agreed to.
Generally, tenants settle interpersonal disputes long before you catch wind of them, but when repeated flare-ups arise between the same neighbors, you may need to step in as a mediator at some point. If you find yourself in this position, ensure you’ve armed yourself with the tools to resolve conflict efficiently, fairly, and respectfully.
Leasing to the right tenant is crucial to keep your property occupied and profitable. It pays to get it right the first time. While sometimes tenant turnover is out of your hands, costs can get out of hand if you are not vigilant.
These are the most common landlord-tenant disputes that lead to eviction—everyone’s least favorite word. According to TransUnion, the eviction process can cost an average of $3,500, which is a hefty sum. To avoid this worst-case scenario, familiarize yourself with these top ten tenant issues to keep high retention rates and profitable properties.
As a landlord, you have many plates to keep spinning, especially if you have more than one property. A lack of organization can hamstring your operation and future scalability. Staying organized to manage your property and boost profitability effectively is imperative.
You’ll need to create streamlined systems, automating tasks where you can, to keep things running smoothly. There are countless digital organizational tools to keep track of accounting, rent payments, maintenance requests, and more.
Some comprehensive property management software solutions, like Buildium, offer tenant screening services. Whatever you choose, repeatable systems and timelines are a landlord’s best friend.
To avoid late payments, your property’s late fee policy should be communicated to tenants as early as the interview process, then reiterated several times within the lease agreement itself.
As soon as the deadline of your grace period passes, a penalty should automatically be applied to the tenant’s account. Landlords need to set up this type of property management system to stay profitable and run businesses efficiently.
By including clearly defined consequences in the lease, tenants sign off on what will happen to them past their payment grace period. Include language regarding penalties for late rent payments in the lease aligned with local laws, and stick to the agreement rigidly.
Maintenance issues are one of the most common and time-consuming problems a landlord can expect to crop up regularly, so don’t let maintenance get messy.
Again, communication is critical. Including details in rental agreements guarantees that communication on maintenance expectations is spic and span from the get-go. Then, stay ahead of any uncertainty by sending tenant reminders for essential maintenance mainstays, such as weekly trash, recycling pick-up, and bulk trash day.
If maintenance is a particularly persistent issue, peruse APM's complete Go-To Property Maintenance Guide.
If tenants spot a code violation, landlords will hear about it. Since landlords are responsible for building maintenance and protecting the safety of their tenants, an essential way to do that is to regularly survey your property to verify that you’re adhering to building codes. This includes safety needs such as smoke and carbon monoxide detectors and accessibility offerings like ramps and elevators. These can vary state-to-state, so check local guidelines.
Who pays for utilities, and when are utility bills due? This is often left unclear between the landlord and tenant, so you’ll want to communicate responsibilities clearly and early on. Delineate in the rental agreement who is responsible for internet, water, electricity, air conditioning, and any other of your property’s utilities.
Then, if you’re covering any utilities as the landlord, double-check that all meters are working correctly between tenants to save money. You should also see if your local ordinances include air conditioning as a landlord's responsibility.
Finally, you’ll want to ensure fast internet availability in your area. While you’ll rarely cover that expense as a landlord, it’s a necessary utility to aid in tenant retention. Speaking of which…
High tenant turnover can harm landlords, resulting in lost income, increased expenses for repairs and cleaning, and extended vacancy periods. A good landlord or property manager will shorten the time between tenants by:
If tenant turnover is a tricky issue for your property, you may want to explore APM’s more thorough guide on tenant retention.
Security is a big selling point for tenants. Complaints about insufficient or ineffective security measures should be taken seriously and dealt with immediately.
Ensure your security system is up-to-date and fully functional before renting a property. If your building has security that goes above and beyond what’s expected for your neighborhood, you can even include this as part of a property’s advertisement. Security sells!
In multifamily properties, you’ll likely have a few common areas. These should be clean and ready for tenant use with well-maintained equipment, from washers, dryers, and gym machines to public printers or business center hardware. To avoid conflict that arises from shared areas, post expectations of use and sanitation by answering common questions like:
Security and pet deposits are a common source of landlord-tenant disputes. Regarding security deposits, the landlord has the right to deduct the costs and expenses of unpaid rent owed, repair items due to damage by the tenant, clean the unit, or store tenants' belongings from the security deposit.
In California, for example, the landlord has 21 days to either return the security deposit or send a detailed itemized list of any deductions and a letter explaining why the landlord is retaining part or all of the security deposit along with any remaining balance.
Pet deposits can be tricky since laws vary from state to state. Landlords may have the right to hold a "pet deposit" during a tenancy, but some states see any type of "deposit" as a regular security deposit.
In general, we advise landlords not to stipulate a "Pet Deposit" amount in a lease, as it can lead to getting the short end of the stick at the end of a lease. Learn more about security deposits in this detailed guide.
Property damage, intentional or accidental, is one of the most vexing rental issues. It costs money to repair the damage, can cause delays in finding new tenants, and harm your reputation as a landlord. As a result, preventative measures such as thorough tenant screening and regular property inspections are critical.
While occasionally, you may encounter a bad tenant who intentionally damages your property before leaving, most property damage comes from regular wear and tear. You must take action from the beginning to avoid this issue as much as possible. Conduct a property inspection with the tenant present during the move-in process.
If you’re looking for an easy button to conquer all these common landlord-tenant issues, consider partnering with a property management company. Working with a property manager means you’ll have an expert in all the areas where you may lack experience. Plus, many property management companies only charge a percentage of your profits, incentivizing everyone to earn more!
Property management can be unpredictable, but that doesn’t mean there aren’t simple steps you can take to handle common issues. With these tips, you’ll be ready for what’s ahead.