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Avoid Rental Property Horror Stories

By Donna S. Robinson | January 19, 2012
property managment

Rental horrors © beholdereye -

With today's growing trend towards rentals, an increasing number of property owners are becoming landlords for the first time. The promises of real estate riches and passive income from cash flow abound. But let the new landlord be advised that the "simple" process of owning rental property can be fraught with financial and legal risks.

The horror stories involving rental property and landlords never cease to amaze me. There seems to be no end to the things that "bad" tenants can do to bring problems on people who only wish to provide a decent person a place to live, and realize a respectable income for doing so. But in many cases, the anticipated income turns into a seemingly endless loss that can cost a landlord thousands of dollars in property repairs, legal fees and potential liability.

Tenants who are evicted for not paying their rent can also render great damage to a property before leaving. I've seen properties that had the walls completely destroyed by a tenant who simply kicked them out. In another case a tenant took an axe to a property, chopped the light switches out of the walls, destroyed the electrical box, broke entire sections of walls, stole the light fixtures and appliances, leaving damage that totaled well over $10,000.

While rental property can be a great income generator, and a very good business, it's essential to keep in mind  that there are a few things you must do in order to insure that you won't become an easy target for "professional tenants" and those who are simply out to take advantage of you. After all, you are about to give someone the legal right to occupy a property that you own, and in so doing, you will be giving complete control of your property to someone that you probably do not know very well.

If you have a great interest in owning rental property, but very little time to devote to learning the business, it's best to retain a landlord attorney that has a lot of experience with real estate and rental property laws. Each state has it's own version of what is commonly known as "The Landlord - Tenant Law". This is a body of state and  federal laws that govern the rights and responsibilities of landlords and tenants. Lacking knowledge of these laws can cause you to make mistakes that could end up costing you thousands of dollars, or make it darn near impossible for you to take back control of your own property from a bad tenant who knows these laws better than you do.

Attorney Carlos Bibbs, who specializes in representing real estate investors and investment companies, cautions landlords on the importance of having the proper business entity to protect you from personal liability, as well as a lease that is designed to comply with the landlord-tenant laws while also giving the landlord the legal grounds to quickly get rid of problem tenants.

landlord-tenant law

Make sure that your tenants don't end up doing this... Image courtesy antiguan_life via

According to Bibbs, landlords often use generic leases they purchase from online sources or at the local office supply store. While these leases may appear to be adequate, they often do not contain essential clauses that are needed to protect landlords from the wide variety of legal pitfalls that can arise. Some may be thrown out of court in an eviction proceeding due to errors or omissions. This could leave a landlord stuck with a tenant who refuses to pay and is difficult to evict because of an inadequate lease. It is highly recommended that all landlords have their lease reviewed by an attorney to insure that their rights are completely protected. Leases also may need to contain clauses that address specific events, such as what happens if the tenant lies about the number of people who are actually living in the property.

It's important for new landlords to  understand how to properly screen potential tenants. Proper pre-qualifying of tenant applications can help you avoid problem tenants. There are a number of companies that provide tenant screening services. Tenant Screening Report is one such service. Prices vary for this service, but most landlords who pay for screenings charge an up front application fee to cover this cost.

For ongoing information and education, there are a number of organizations and clubs that cater to landlords and rental property managers. Local real estate schools and colleges offer continuing education classes in property management. Even if your state does not require you to be a certified property manager, these classes are excellent courses to take if you're new to the world of landlording and property management.

Taking care of business is the best way to insure that you'll have a happy life as a landlord. Don't wait until you have a problem tenant to discover that your lease is inadequate to address the situation. Rental property is a great business. When managed properly it can be an excellent source of income and tax benefits for years to come.

Donna S. Robinson has been involved in the real estate industry since 1996. A licensed agent and real estate investor, she is a recognized expert on residential real estate investing. Her course, "Fundamentals & Strategies For Real Estate Investing" is approved for CE credit by the GA Real Estate Commission. She has authored several books on real estate investing, and consults with residential investment companies. She also offers coaching services to real estate investors.

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