Managing an investment property is a huge responsibility. The idea of having a free and clear property or two to generate income every month might sound like a dream come true, but in reality that journey it is full of unexpected hurdles.
There is always some degree of risk involved when renting out a property, but hiring a property management company that you can trust takes a lot of the stress off of your shoulders. There are a hundred reasons to hire a property manager, but in short, you need to protect yourself, your time, and your investment. The property management horror stories shared below shed some light on the many ways things can go wrong when you are renting out a property.
Terrible tenants
George Paiva shares a story about one of his rental properties on Bigger Pockets that reminds us why it is important to check in on tenants.
“There were 3 people living there. Boyfriend, Girlfriend, Girlfriend’s 4 yr old daughter. That place was literally a pig pen. Garbage, car parts, broken windows and doors. I must of spent $5k out of pocket and I did all the work. It took out 3 truck loads including a utility trailer with those loads of Garbage and Broken Furniture. I just couldn’t believe how much stuff was in there. As bad as I thought the clean-up and repair was, I couldn’t stop thinking about the little girl growing up in that. I had a son the same age. To this day I wish I did a site inspection and called child protective services on them.”
Maintenance Nightmare
Jimmy’s property management horror story comes from Lighter Side of Real Estate. This maintenance nightmare jeopardized the happiness of his tenants and could have been avoided with the access to experienced contractors and repairmen that comes with partnering with a good property management company. Jimmy got the following text from his tenant, Maria one night:
Maria: ‘Hey Jimmy, we’ve got A LOT of rain coming in through the back window. It’s coming through the wall.’
Jimmy goes on to say “of course, by the time I arrived it wasn’t raining so I couldn’t tell what was going on. The next day I return to put some tarps up with my kids, just to buy some more time to call a few contractors and figure it out. It took 2 additional weeks for 2 contractors to finally go over there just to assess what was going on and give me an estimate. Meanwhile, the tarps didn’t work and my house continued to flood every time it rained. And as murphy’s law would have it, it rained pretty much everyday.
Why multiple contractors couldn’t figure out what was going on is beyond me. One of them wanted me to rebuild the whole back wall at a measly price of $12,000! Another said he could rebuild part of the back wall for only $2,000. I chose the latter. Meanwhile the poor tenants had to deal with this for 2 months!”
Property Damage
A landlord wrote into Curbed with a property management horror story that included some of the strangest and grossest property damage imaginable. Leading up to that, this tenant had refused to pay rent for 8 months. He had to go through the entire legal procedure, and once he achieved the eviction things only got worse..
“We quickly had a new resident interested in the unit. We did our final touch ups and the minimal needed repairs prior to them moving in just three days after the sheriff showed up. Within a couple of days the new tenant complained that the apartment had an odd odor. We inspected and did not find anything wrong. The HVAC filters had just been replaced. We had replaced the carpets as part of our standard turn. The walls had a fresh paint of coat. Nearly everything in the apartment was brand new. The source of the odor could not be found.
A few days later, more complaints from the new residents. Again, we inspected and found nothing wrong. As a precaution, we had the apartment repainted, filters replaced, carpets cleaned and even had a deodorizing bomb while the resident was out of town for the weekend.
Almost one month later, the new resident was still complaining about a fowl odor throughout the apartment. We inspected yet again. However, this time we could start to see some slight discoloration in some portions of the walls throughout the apartment. We began to poke holes in the drywall where this discoloration appeared. To our complete surprise, maggots crawled out of the holes. We began to pull back the drywall piece by piece. The evicted tenant had cut multiple holes in the drywall in every room of the apartment and thrown packages raw meat into the wall cavities—steaks, ground beef, chicken breasts, pork chops, etc. Before moving out, he patched the holes so well that they looked as if they had never been touched.
We had to rip every piece of drywall, insulation, etc. out of the apartment and the surrounding units to get rid of the smell. But, I don’t know if I’ll ever be able to get the memory of that smell out of my mind.”
7 Months of Deferred Rent
A member of the National Association of Independent Landlords tells the story of a horrible tenant that he was left with after opting to not run a background check because the tenant flashed some cash up front.
“A nice dressed man came to rent my property. He drove a very nice car and said he had a good job. When I asked him if I could run a background check on him, he said his wife had recently died and he wanted to rent now! He flashed a lot of cash and I agreed. He never paid rent again, after the first month. When I started to evict him, I found out he filed bankruptcy. By law he did not have to pay me rent while he was in bankruptcy court. I was considered a creditor. He lived in my home for seven months without paying a dime. I still had to pay my mortgage. I found out later, he had done this repeatedly.”
Tenants Not Paying Rent
Melissa W shares her story of dealing with scam artist tenants on Bigger Pockets.
“There was a family who didn’t pay rent and called codes. There was a lengthy list of violations, some of which he had caused himself (holes in walls, excessive trash, etc). Still, it is the landlord’s legal responsibility. They would make appointments with maintenance and not let them in. Since they changed the locks and had dogs there was nothing they could do.”
Knowledgeable property managers know your rights and have seen all the tricks. They can guide you through this kind of situation, or better yet, prevent it through vetted screening processes.
Unexpected Tax Changes
Holly Johnson talks on The Simple Dollar about her regrets over not being informed of the impact that owning a rental property would have on her taxes.
“One of the first lessons we learned about owning rentals came as a huge, scary surprise and ended with a night of tears and weeks of stress. I’ll never forget the day I opened our property tax bill for our first rental and realized that our property taxes had gone up 300% overnight. property tax caps on rental properties were a full percentage point higher.”
Avoid Your Tenant Horror Story
Vetted screening processes, knowledge of real estate tax laws, and access to a team that handles rent collection and home repairs can protect you from the vast majority of property management horror stories. Don’t underestimate the importance of putting your investment in the hands of trained professionals. Contact the professionals at Paradise Care, the sister company of RE/MAX Paradise to get your property management quote today.