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Kicking Out Deadbeat Tenants

There comes a point in every landlord’s life where you have a tenant who:

  • Doesn’t pay on time
  • Damages their own unit
  • Damages the common property
  • Fights with other tenants
  • Does something illegal on the property
  • Threatens or attacks you
  • Is paying old and very low rents
  • Doesn’t play well with others
  • Hasn’t paid in several months

Often it’s when you’ve just taken over a new property. If you’ve just bought a multi-family property then it can be even more frustrating, because you’ve inherited 10-200 tenants all at once.

Brent’s going to be talking about this topic at the upcoming October Edmonton and Calgary REIN workshops, and he’ll also be on a panel at the Advanced Landlording and Investing Fundamentals Expo in Calgary October 16th and 17th. (I’ll be there for the Friday and Saturday I think.) If you’re at either meeting, you’ll hear him and Don talking about some strategies to kick out the deadbeats, and how we approached the reality of handling well over a thousand tenants.

To help him get ready and cover the common and interesting situations we’ve encountered in many, many years of dealing with other people’s properties, Brent and I sat down and ran through the types of situations where you’ll need to deal with a payment issue, a legal issue or just want to change the tenant demographic. One of the things we figured out is that for the tenants we’ve put into buildings that we’ve managed for a while, we have start disciplinary proceedings on less than 2% of them. For buildings we take over with poor management by the owners it’s closer to 10% and sometimes as high as 20%. (Note I said poor management by the owners, because in our experience it’s almost never the property managers’ fault, but that’s another topic.)

I’ll cover a bunch of what we discovered in a post after the ALIFE weekend, but I want your input before we finalize things.

  • What was your most frustrating tenant issue?
  • How have you successfully changed the tenant profile in a building?
  • What are the most important parts of your tenant screening system?

Photo Credit: “Woodfall’s Law of Landlord and Tenant” by umjanedoan, on Flickr

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    { 5 comments… add one }
    • Andrew C. MacDonald September 30, 2010, 2:15 pm

      Hi Chris, this might not be a situation where kicking the tenant out is the best option, but I have come across a frustrating tenant issue this week. Have you ever dealt with a tenant who will not co-operate with showings when a rental property is listed for sale? I am sure this is something other investors have to deal with, and since the tenant doesn’t always want to leave, they often have little incentive to help the owner sell the unit. Any tips?

    • Brent Davies October 1, 2010, 2:18 pm

      Hi Andrew,

      I run across this many times. Put yourself in the tenant’s place. Bossy and rude realtors wanting access at all hours, and I will have to find a new place to live.
      I prefer to sell properties after the tenants have moved out.
      The big advantage is the realtors have 24 hour access in a vacant property, but have to give 24 hours notice to show where the tenant is residing. Owner occuppied properties are easier as they are motivated.

      One strategy is to pay the tenant for the hassle of having too many buyers go through the property. A couple of Tim Hortons Cards are great for openers, and a couple of hundred when the property sells. (Not before).

      • Ken October 4, 2010, 4:22 pm

        I tried something similar to this. I offered reduced rent while the property was on the market. Big Mistake. Things were great for the first two weeks and then the tenant became resistant to all showings as they were fed up with Realtors even after being given 24 hours notice. In fact, my tenant felt that me selling the property meant she could do as she pleased as she brought a pet onto the property against the rules of her lease. I decided to pull the listing and gave her 3 months notice to vacate, but I had a battle on my hands trying to get my tenant to pay full rent again. 3 months later she was gone but the re-sale market has cooled since the spring here in Edmonton, so I decided not to sell. After that experience, I’d never try to sell a tenanted property again. It’s a headache that you truly don’t want and there was always conflict between the pushy realtors and my evasive tenant. I had to referee several bouts between her and the realtors. What a nightmare!

    • Andrew C. MacDonald October 4, 2010, 3:58 pm

      Thanks Brent. The property ended up selling for slightly more than list price, but we can only wonder what was left on the table as a result of an uncooperative tenant. We gave the tenant a gift up front, but will try offering a “back-end” cash incentive if this situation arises again.

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