S-O-S, I have a problem tenant, what do I do now?

Please note that this post is an excerpt of the webinar hosted by our sister company, The Landlord Code, where our co-founders coach DIY landlords how to avoid problem tenants and maximize rental profitability. Get access to more training like this in our (free!) private Facebook group HERE.   

So today’s topic is S-O-S, I have a problem tenant, what do I do now?

You’re not gonna run. You’re not gonna hide today you’re going to learn the answers. So let’s talk about it. – Lets talk about it. All right, so today’s training, we’ll cover the problem. So you’ve got a problem tenant, the short term solution; what to do right now are five steps to stop the bleeding. And then we’re going to workshop three real life examples that we face on a regular basis and then give you the bigger picture which is the most important thing you can glean out of this training: how can we avoid getting here in the future?

The Painpoint

So the first question I’d like to ask you and have you just consider for a moment is what type of problem tenant have you had, do you have or are you afraid of having? And then thinking about that for a moment and also asking yourself how does that make you feel? And we can tell you for time and time again, that landlords when they come to us, they feel worried, uncertain and frustrated more than anything else they are frustrated. – And we work with landlords of all levels. We’ve seen from your brand new investor who’s bright, shiny and just looking to figure it out to your experience investor who owns millions of dollars of real estate. And they all have the same concern, a bad tenant, a problem tenant, concerned about the future, uncertainty and feeling frustrated. – And this pain isn’t necessarily relegated to the rental. It bleeds into their marriage or their relationship how they perform at their job and also other aspects of their life like kids.

We have a client who’s pretty active in our foundation homes portfolio. And he came to us because his rental portfolio was giving him so much heartburn that his wife said, “Hey look, you need to figure this out.” So he got a property manager and she was so excited because not only were they…they’re obviously husband and wife, but they’re also business partners. And she wanted him to get a property manager, not just for him, but for her because everything else was falling apart and it was affecting their marriage which is totally transformed now, which is awesome. And she’s so happy that we’re involved. – And this is not a pitch for property management, right? You’re here because you wanna learn about managing your rental yourself. This is a pitch about mindset and getting you to think about considering a mindset shift and how you approach the management with your level. This was not a newbie investor, but it’s just a great example of how frustration with your rentals can bleed over into the rest of your life. If you don’t take action and do something. – Exactly so the wrong mindset will create more problems.

The Solution

So let’s get into the solution. Here are our five steps to handle a problem tenant.

Number one – The first step: you need to call the tenant. Maybe you discovered something on an annual inspection or a walk through. Maybe your plumber reported something. Maybe your neighbor has reported something. The first step, if there’s trouble brewing is you need to call the tenant. You need to hear what their concerns are. You need to hear what the result is that they are trying to get out of this. – You don’t wanna hit the new button or avoid it or just build up resentments. Communication is key, it can solve a lot of problems and the best way to do that is to call them because email and or text can seem a little bit more confrontational – Yeah so at this step early on and Christopher hates it when I use this phrase but while I’ve used the phrase snooping poop, you’re trying to figure out what can you glean from the tenant about what the real motivation is that’s causing this problem? So one quick example would be we have tenants right now. This just happened two days ago in a high-end property. And we had an electrician go there for a problem. And then he called back our property manager and reported, hey these tenants have installed an electric charging station for their electric cars and they didn’t get our permission. And they did it without a licensed electrician. And they did it without pulling permits. And he said that this  whatever electrical upgrades they’ve made is causing the problems with what he was then called in to deal with. So we have a problem on our hands. So the first step that our property manager took was called the tenants, Hey guys, what’s going on? What are you trying to accomplish here? It’s pretty obvious what they were trying to accomplish but we need to hear from them. – Yeah, exactly what they’re looking for and try to figure out a good resolutions that benefits everybody.

Step two consult your lease– your lease contract if it was written recently, or if it’s written well will have terms in that you can leverage to fall back on. So for example if they have unauthorized occupants or unauthorized pets or if they’ve made modifications as we just discussed the property without permission the lease contract should address that and you can go back and say, hey, look you’re currently in violation of your lease. Let’s figure out a way to make this right but you can always leverage that because often times sense can say, well, look it’s my right to do this. Or I can do that. And if your lease contract says something different. That’s what is going to be the most valid point you can make. – And this is really important for our landlords who often start to bring the emotion into this, right?

One of the most common things we hear from a DIY landlord is how could my tenant do this to me? How can this be happening to me? And that’s a victim mindset, right? This is a business. And this is what we teach all the time in the landlord code is you need to treat your property like a business. So in a business, if things are going wonky you’re gonna look back to your contracts, right? You’re gonna look back. If you’re having a problem with a vendor you’re having a problem with a supplier you’re having a problem with a client You’re going to look at your contract.

Step three, analyze and compare- What are the pros and cons of making exceptions or compromises? So we’ll use the example of having an unauthorized pet as an example. Now, if this tenant has otherwise been great has cared for their property, has paid rent on time. And they’re looking to stay in your property longer term. You may wanna make the exception to write something into your lease that says, hey now they’ve got a pet or compromise. Maybe they’re paying a little bit extra for that pet to be at the property. If you’re absolutely no pets, no dogs. And you’re gonna also have to consider, well what does it mean if I terminate this tenancy? How’s that gonna impact my bottom line at the end of the year, if I have to go through another lease up another turnover what’s the cost of vacancy. So you wanna look at all of these points as you make your decisions of whether, what you’re going to do. If you’re going to make an exception or compromise based on the terms of lease contract – Right, so step three is where we really want you to practice taking the emotion out of it. And sometimes it can be helpful to bring in a friend maybe not a spouse. If maybe things are getting a little tense, maybe you guys disagree, bring in like a neutral party to run the scenario by.

And again, you really wanna think about it as a business. What is the financial cost to me as a business? Does this help or hurt my business? Another good example at this point. And then we’ve seen this come up many times over the years is, a tenant moves in and then as they’re moving in they realize there’s no blinds in the master bedroom. And they say, I’m so mad, I need blinds, you need to give them to me. So step one, you’re gonna call the tenants. Say, what are we trying to get here? They’re gonna try to get blinds, right? That’s the result they want. Step two, you’re gonna look at your lease. Does your lease call for blinds? It does not call for blinds. In fact, if you have a good lease, it’s gonna say these are the only things that are listed here that are included with your lease. And the tenant accepts that condition. As in, if you’ve done your move in; your proper movement inspection, right? So you’ve got the paper to back up and the contractor to back up your position but then you gotta go to step three and you think, okay is this gonna help or hurt my business? Would losing these tenants  going to make my life easier? Or is it going to make it harder? How much would this actually cost me? Is this going to improve my asset in a way that helps my business? So do you need to pay for these blinds? No you don’t. Your contract says you do not. And I’m sure you told the tenants this when you showed them the property and they heard otherwise. So do you have to know, but should you, well maybe there’s a compromise. Maybe they pay for half and you pay for half. And the agreement is they stay at the property when they leave. Maybe the tenants paid for it in entirety and they take it with them or you purchase them at one third the cost when they leave something like that. But that in the long run is something that would improve your asset. So that maybe is a good business decision to make because it your asset keeps your tenants happy and everyone moves on. – Yeah I always like just to tailor that example a little bit further, I always like to start off, when I have these conversations with my clients is like start off with the worst case scenario a set of blinds for your master bedroom’s gonna run can’t run as much as 1000, 1500 bucks. It could be as cheap as $500. And if you look at that cost and if the tenants are just moving in if I’m spending a thousand dollars to remedy issues with your tenant going forward or show them that you are a good person and that you care about them being happy in your property is going to pay dividends going forward. – I mean in this you could spend less– – And then work backwards on in terms of let’s see what kind of compromises. Maybe we can negotiate half or something like that. So just think about those terms.

Step four, put it in writing– So I can’t drive this home enough. Once you’ve had the conversation with the tenant, you’ve acknowledged them. You know the result that you’re both looking for and you’ve come to a resolution; you wanna follow this up with an email or text preferably an email saying, dear tenant thanks so much for getting on the phone with me today. I heard your problem was X, Y, and Z. This is the solution that we came up with. This is the time frame under which we’re gonna accomplish the solution. And this is the cost this is gonna cost you and cost me. I look forward to getting this taken care for you very soon then end. – And also to be clear you may not be having this discussion live. We mentioned call the tenant that step one. When you come up with your step three you analyze your compromise in this step you could just be presenting the compromise, right? Because if you get the tenant back on the phone it may become more of a negotiation. And that may be harder for some landlords who have a harder time maybe drawing that line in the sand, right? So putting your response in email, this is your problem. I heard you; we’ve thought about it or I’ve thought about it. Here’s the compromise I’m willing to put out. And here’s the costs like Christopher said to you and me. And here’s the timeline. You wanna make everything as clear as possible while keeping in mind that everything you put in writing is something you’re going to need to stick to right? So don’t say I’m gonna get you blinds and don’t get the blinds. Don’t say you can have the dog and then change your mind, put it in writing. And that’s now what’s going to happen. And in addition, if after that phone call or during that phone call, you heard what they had to say. And you have to think about, or consider a solution. You also wanna let them know, hey we discussed this on this day. As we discussed, I’m going to be considering this over the next day or two and I will be getting back to you, whatever. So these are the things that you wanna make sure you put in writing so it’s clear and you can fall back on because as Darcy said once it’s in writing, it’s cement, all right.

Step five. – This would be the notice of violations. So in your three, when you’re analyzing and deciding what’s best for your business there are a number of problems out there where the best move is to start the process of eviction. Now we all know. – Or three day pay or quit or cure or quit. – Right but which would be taking you on the line to, you have made peace with the fact that the ultimate result here may be an eviction because the problem is big enough. That is the path that you have to go. So step five is if it’s applicable and this is not applicable in every scenario, but if it’s applicable, you’re going to be serving the notice of violation or non compliant or whatever the notice looks like for that particular property. And we’ll, again, we’re gonna workshop this in three real life examples. So you can see what we mean. In the example, we gave him the blinds. There’s probably not a notice served, right? Because the tenants are not violating anything. You’re just solving that by your email correspondence step four, and saying, this is what we’re offering. And then you guys are negotiating back and forth to see if that works, but there’s no violation there in the event of an unauthorized pet. If you’ve decided they cannot have this pet then you are serving a terms of notice whatever the violation. Well, depending on what the state is what your particular laws are around that. But you have made the business decision that you are okay heading down the eviction pass path or loss of tenant path because this violation and this problem is serious enough that either the tenant needs to stop it or eventually get out. And what you’re gonna do is start building your paper trail to protect yourself and your asset on your path to getting that tenant out. – And step five is you don’t know. Not everybody needs to go to step five. Step five is like the last resort. – You don’t want to be at step five. – If you can avoid step five, avoid it. But step five is the last resort. –And it’s how you enforce lease, right? Because it’s not something to be afraid of. It’s just something to, you may be consulting an attorney about. And it’s something to weigh carefully to make sure that’s what you wanna do. – Why, because it’s a business, right? So now we’re gonna get into the five steps to handle a problem tenant. Workshop, so just to go over this again, you call them, you review the lease, you analyze and decide whether or not you’re gonna compromise, evaluate the pros and cons. You follow up in writing and worst case scenario you serve notice.

 

So let’s workshop three common problems. Number one late or unpaid rent, lease violations and property damage. Does any of this sound or look familiar to anybody? Has anybody ever had to deal with any of these three things before? – So I’ll tell you, in our property management portfolio, we have some of this going on but most often our experience with this is when a client who’s been managing their own property comes to us and we’re essentially inheriting a problem tenant. And so these are all the steps we’re gonna take to start to turn that tenancy around. – No, right. So now let’s talk about lease violations. The most commonly used violations that we run into are unauthorized occupants and unauthorized pets. Let’s go with unauthorized occupants. Cause we talked about pets a little bit, okay. So we’re gonna workshop the five step process here. So let’s say you’re doing an inspection or a neighbor calls, whatever. You become aware that there’s an unauthorized occupant in your property. – The first thing you’re gonna do is call the tenant find out what’s going on. Hey, I noticed that you have an extra five cars at your property. The neighbor notified me that the same person keeps coming out for spending the night, whatever that may be. I just wanna find out what’s going on before I draw any conclusions that may or may not be true. – So the tenant may say to you and we had this come up in San Francisco recently. Oh, we moved a roommate out and we’re moving a new roommate in and oh can you put them on the lease? So not ideal right there. We’ve in this case, found out after the fact super not ideal. – They already had possession technically. This new tenant unauthorized tenant already had possession of the property. Everyone knows we’ve got extenuating circumstances right now across America when it comes to evictions. So as a landlord, your back is a little bit against the wall when you are in the step three, analyze compromise scenario. So in this particular scenario called the tenants found out there’s a new tenant in there. They want him on the lease.

Number two, review the lease. We didn’t need to ’cause we already know what’s in the lease, but– – Lease says, hey, I can have up to two roommates in here. You have to honor that if it says this things is just supposed to be for John and Jane Smith and John and Jane Smith are living in the property and Bill Adams is now there. Well, then you need to make a decision. And that’s when you start getting to step three – Analyze or compromise. So let’s say your lease specifically says no unauthorized occupants. So you know that technically as the landlord, you are in the right and you could start through the process of whatever it looks like in your state, serving a cure or quit notice, meaning tenant needs to go. You’re in violation. If you don’t, we’re gonna start down the process of eviction. That’s one step you could take. The other step you could take would be. – To write this person on the lease as an occupant making them both jointly and severally liable for the lease. Meaning now they have to go through the application process. You wanna make sure you know everything about this person they’re all in the contract. And if anything happens with damage or anything else they’re also gonna be on the hook to cure that issue. – So in the case that the example that we gave ideally in the past, we probably would not have moved in or accepted an unauthorized occupant. In this particular case. I think the guy even had one late rent payment on his history. It was not an occupant who normally we would welcome into our properties. However, since the tenants had already gone ahead and moved him in and we can’t evict anyone right now, anyway because it’s San Francisco, we spoke to the landlord we compromised, this is in California. And we said, well, it’s better to have this guy and his social security, have him since he’s already there. And there’s really nothing we can do about it. It’s better to have him on the lease and have him additionally responsible than to just not acknowledge him, which is a strategy. And people in rent control areas might need to take for specific rent control reasons. But again because of the unique extenuating circumstances regarding eviction moratorium throughout the country right now, that was a compromise that we had to make. And our client had to make due to the certain circumstance. – Under normal circumstances of this happening the compromise and the pros and cons that you’re gonna wanna consider are what’s gonna be the cost of the eviction, because that’s not cheap versus continuing to get the same rent that you’re getting and maybe renegotiating this contract at the end of their existing lease term. So termination of a contract evictions are very, very prickly. They’re painful. And they do cause a lot of problems and stress. You just wanna evaluate all things not just the financial issue but also how that’s gonna weigh on your mind. Once you’ve identified what you’re gonna do you want to follow it up in writing. So in this case, we followed up in writing. We had the tenant go through our application process. We put them on the lease. And in this case, no notice serving step five was not necessarily because we were able to compromise. – Right

So next example – Late rent or they haven’t paid rent so this is a big one right now. We know it’s a hot button and this is the strategy and the steps you have to take here are a little different right now because of the extenuating circumstances. And it varies from state to state. Okay, I wanna address two scenarios with this one. So the first thing you’re doing rent’s late, your call. – Hey, what’s going on with rent? I usually say, hey it’s the fifth or it’s the second, or it’s the whatever. It’s the end of the day on the first. You’re typically on time. Hey, I just wanna let you know, your rent hasn’t arrived. Is there something going on? Do I need to be aware of something? – Right, oh, it’s coming, it’s coming., it’s coming. – I’m sorry, my bank did this thing or I am on my way to the office it’s coming. – In our portfolio our clients well pre COVID would be like, oh I’m in Europe and I forgot. And it’s coming. – Taking credit card? So you call, you figure out what’s going on.

Number two, you review the lease. When does your lease say rent is due? Usually there’s a grace period. Everyone writes their leases a little different. So you wanna review what the exact terms in your lease that you signed with this tenant say. To determine, are they late? Are they not late? – And then analyze and compromise. So this is when I think you’d get into a scenario, but we do have a late fee for our leases, for the tenants that we manage. So usually if it’s just an oversight or a mistake the first time we’ll let the late fee slide. And hopefully they’ve learned their lesson. They’ve been warned. – Everyone gets one free pass in our portfolio. – Because things happen. If these things happen to us, things happen. But in the event of it’s maybe it’s something related to a job loss or a move or financial distress, then you wanna analyze the problem and come up with a compromise because getting some rent is better than getting no rent. – Well, so let’s talk about this two ways. So let’s talk about in a non COVID time, right? Hopefully in another year, we will not have any of these eviction moratoriums in any of the states and things will hopefully be normal. There’d be a different process you’d take. So in a non COVID time you would serve notice, right? And it’s not an eviction notice right off the bat varies by state, right? But generally there’s some kind of notice like, hey your rent is late, right? It’s important in the case of late rent that you start building your paper trail, right from the beginning, because you never know when this is going to end up in eviction. And it is the most common scenario, right? And the biggest complaint and the hardest one for landlords because you need that money. You’re relying on it to get your mortgage paid. So this is a big one that you have to start creating that paper trail. Even if you’re gonna waive if your policy like ours is you waive it consistently for everyone, right? The first time we still follow that up and writing this is your first waiver, there will be no more waivers. Rent is due on this date. Please don’t let this happen again. – And you’re gonna wanna check with your state on how to serve like a three-day pay or quit or a three-day cure or quit or whatever kind notice. Because they vary from state to state and it will. And I know in California how you serve that initial notice is going to affect how any follow-up notices like an unlawful detainer are gonna be served and how they need to get involved. If you have any questions about that consult an attorney or a professional around it.

So the most common scenario we hear here with DIY landlords is okay, my tenant’s calling and they’ve got all these excuses and it’s so hard to hear these excuses every month. So here’s the problem. You landlords, who are kind of caught in this loop are making, you’re not following this process and you’re not following up with things in writing and you’re not serving the notices. So even if you’re going to be giving them this one-time pass in step four, you’re following up and writing. You’re making very clear. This is a one-time pass you’re giving them depending on your state this may include still serving a notice with it so that you’re creating this paper trail. What you do not want to do is say, ah, ah, okay, okay. Just don’t be late next time you don’t do that. You need to have some kind of formalized process in place. So this tenant understands, even if you’re making an exception this one time you do mean business and all the rules that are in the lease are going to apply because when they make that same call next month if you have the same reaction, you’re going to get the same result, which is consistently late rent. – And don’t be afraid to go back and fall back onto the lease. So if the lease says that if they’re late on day two or day three, there’s the late fee. Let them know, and then charge them. It’s okay to have a business mindset around this. And people have stories rough things happen to people all the time. You can hear people and understand what they’re saying but you could also say, I get that. I understand, but also I need you to pay your rent on time because I also have bills to pay. And I have things that I need to take care of on my end. So please understand that we’re working towards the same level, the same goal here, but I need you to pay your rent on time. – Right, so the second scenario, which is the circumstances we’re currently in is all these COVID restrictions, right?

So right now, depending on your state; again landlords’ backs are kind of up against the wall. You can threaten all you want eviction, but if these tenants are following the proper procedure to claim COVID hardship or maybe your state doesn’t even require that they have that you may not be able to evict them for months on end for un-paid rent. And that certainly is the case right now in California. And that is hard for landlords. We are getting these questions left and right. Is there any support for landlords? There is not. So let me tell you what you can do. – So the thing that you wanna do is document everything. So if they’re like in California and in our market right now, we’re serving these 15 day notices of late rent or un-paid rent every single month in triplicate posting and snail mailing and emailing and keeping one for our files. So we’re doing that on a regular basis. So if and when this moratorium ends we have a paper trail and also inserted into that notice is a ledger showing how much rent we have received right now. Hopefully they’re paying the 25% which they’re supposed to be doing in their state, how much rent we’ve received. And how much is outstanding. We are not harassing them. I wanna make sure that you understand that we are not harassing them for this unpaid rent because we understand the states involved and may have protections. We just saying, hey, look on this date you still owe X amount of dollars and you have a balance that’s unpaid. And we’re looking forward to receiving that money. And every month that balances goes up and the same friendly notice goes out – Right so this applies, whatever rules you have whatever state you’re in. You’re saying this five-step process. And you’re gonna just start building your paper trail because if these tenants can’t pay their rent then eventually when it’s able to, you are going to move towards an eviction, right. But first you would call them, you’d figure out, right? What’s going on? Are you gonna pay? Are gonna pay some, are you gonna pay none. Okay, got it. You review the lease. You probably know staying rent-free is not coach in your lease.

 Number three, analyze compromise. This is where you might talk to your tenant and negotiate. Can you pay anything? Can you pay? What if I reduce the rent? What if we let you out whenever you want out of the lease. Most tenants prefer not to– – We’re gonna forgive your rent this month and next month. As you get back on track in two months or whatever that is, but then following that compromise you wanna make sure that it’s in writing and they have acknowledged the new terms or whatever you guys discussed. – Or the temporary term to make sure whatever you’re negotiating and agreeing is in paper. And then again, depending on your state if you have a tenant who’s not paying rent you absolutely need to be consulting an attorney to make sure you are following the proper steps. Because as we mentioned in California we have to do these 15 day notices every month in order to protect the landlord’s right to eventually someday get this money, go after the tenants in small claims for the money. – And just so you know we’ve discussed this with different attorneys who are all real estate landlord attorneys and have received different answers across the board at how this is supposed to be done. And the one thing that we’re just pushing is just process and consistency. We’re doing it across the board. Everybody’s getting a notice. Everybody’s getting a ledger of on unpaid rent. Everybody’s getting something. And it’s being sort of the exact same way because we do not want to leave any stone unturned.

Next scenario, my house is being destroyed. So what do you do? You wanna call the tenant. Hey, listen I noticed that when I was just in the neighborhood seeing my friend who I used to be neighbors with I noticed that the wall in my front yard is torn down, what’s going on? – Right, so you’re gonna figure out what’s going on with the tenant. – Or I noticed a smell coming from your side of the yard. Is that marijuana? – Well, which is legal in quite a few states. Whatever the type of damage is may be again, you may spot it on an inspection. You may have a vendor who reports back to you. It may be something you notice from the drive by we’ve had hoarders come up. That gets noticed on an annual inspection which is why we harp on the importance of the annual inspection. – Or they have furniture that’s too close to the walls. And now it’s causing mildew and moisture build-up. – Yeah any kind of damage that you can think of, right? Same scenario. You’re gonna call the tenant. You’re gonna see if there’s anything to know you’re gonna review your lease. And this is the hardest part with this particular when it’s damaged your property, especially if you used to live there and you’ve got emotional attachment this is the hardest part. You’re probably gonna have to let it go. – Yeah, if you’ve taken enough security deposit and I’m glad you brought that up because I’ve had this conversation with clients a number of times, I actually had this conversation with clients, all of us all throughout the year. And they’re like, they’re just ruining my house. And I’m like, well, look right now you can’t do anything about it. And everybody’s going to have their own version of what is clean and what’s not clean. And someone could be living in their property feeling that they’re keeping it up and maybe they’re not. But at the end of the day, the only thing you can do in California and we’re in California is wait until they move out and see how they turn it over.

You never know. They could have an amazing cleaning team. That’s gonna turn that property and make it look better than it ever looked before. And you’re gonna be so surprised or if they don’t do that, you have the lease which you can fall back on. You have a security deposit, which you can fall back on and utilize to remedy all the issues that are there. – And if you’ve had proper screening you’ve rented to a tenant with qualified credit. So they have some skin in the game. They have a reason to make good on their debts to you and to not wanna go to small claims court or to not wanna go to collections. And they have a reason to wanna cure the problem. So now some of these problems there is gonna be a cure for right. If like you said, you drive by, I don’t know. – Well, we had an annual inspection at a place and the tenant was hoarding and we told them, okay you’re hoarding. And we serve them a notice that they need to fix it. And we put a schedule out of when we’re going to come back and re-inspect, they ended up doing what they needed to do. And then when he moved out, there was some damage but the security deposit ultimately covered it. – Because we’d uncovered it during the inspection before the hoarding got too bad. And we were able, I don’t think we used the term hoarding when he talked to her. I think it was, you’ve got a little too much stuff, a fire hazard, right? So there were terms in our lease that allowed us to require the tenant to cure or to comply or quit. So in her case, we had her moving the couch away, clearing out, there were specific actions she had to take, which she did comply with. – Removing her phone book collection from the 80s. That was awesome. – There were some gems in there, some gems. – All right, moving on. So we’ve got some good news and we’ve got some bad news. The good news is you now have an action plan – Whatever the problem is you’re having with your tenant.

We hope we’ve given you an outline of five steps even if they’re rinse and repeat towards those last ones. – We’ll just go over real quick. – Okay. – You wanna call. Review the lease, analyze, compromise follow up in writing and serve notice if needed. And that’s like the big red button. – Yeah so I wanna say we didn’t mention before, so four and five, you may have to go on a rinse and repeat cycle. Meaning if this is a violation, a lot of people will say, my tenant brought a pit bull, right? Unauthorized pet, I’m not gonna allow it. They’re not getting rid of it. Well, you’re going to continue to whatever the rules are in your state.

You’re gonna continue to serve that notice of violation right? Follow up in writing. And then in that case you’d be starting the eviction process when and if it’s allowed based on that but you may need to serve that a few times until you get to the point where you would be proceeding with eviction. – Okay so now you know, so the last great news is – Good news you got to play and the last great news is. – That these problems are symptoms of the greater issue and their causes are you can trace these causes back to poor screening, poor policies, poor communication and emotional reactions. – And what do we wanna say about this is we’re not trying to point fingers at you as the landlord, but when DIY landlords come to us with a problem, we’re not usually looking at the problem. We’re asking ourselves what happened two steps ago, nine times out of 10 when a landlord finds themselves with the problem tenant it can be traced back to poor screening that very first thing. – Yeah so just an example of that. When I get someone who’s called me, who’s now needing property management. I start asking him, so what’s going on with your tenant? Oh, they’re not paying rent. They’ve got these people live in there. They’ve got all these dogs. – They’re threatening to sue me. – I’m like, well, how did you find them? Well, my friend and they were my friends of a friend and they seemed so nice. I wanted to help them out. Well did you get, do you have them file an application? No, because I knew them. Or they didn’t take enough security deposit. And now damage is happening to the property but there’s not gonna be enough security deposit to cover it. – Or what does your lease say? I don’t have a lease. Or they’ve been there for 10 years and the lease is from 10 years ago or it’s something that I made up or I had my attorney who actually works in marriage therapy write it, no you need to use an up-to-date lease. You need to have a top notch screening plan.

You need to have policies. You need to have your own policies for how you’re gonna be handling your business. – Exactly and you wanna have effective communication. When a tenant calls with an issue or something that comes up, you wanna pick up that phone call and you wanna call it back and you wanna know what’s going on. And again, going just down the path of this the emotional reactions, it is very easy. Especially when someone is you think is destroying or not taking care of a very expensive asset, like a house to go oh my gosh, this is gonna cost me so much money and lose your mind. – Right and it’s always, we hear this over and over again. Why me? Why are the tenants doing this to me? How could they be doing this to me? – Exactly. – It’s a victim mindset. You don’t need a victim mindset. – If I had $10,000 for every owner I had to talk off the ledge. We’d be really, really rich right now. So but what if there’s a better way, right? And this better way comes with a shift in mindset and just imagine for a second that your property is running more passively than it is today. It is more profitable than it is today. And more than anything else it’s predictable. You know what’s going to happen on a regular basis. You could sort of infer or anticipate issues or non-issues because you’ve done all the things before to get you to this place. And this again, happens with a shift in mindset and that is shifting from, hey my rental property is a hobby to now it’s a business. You’re making business decisions around your property in order for it to work better and more functional.

Thank you for today, we appreciate everybody tuning in. We appreciate your time. You could be a lot of places today. In the meantime, stay safe and stay healthy, take care, everybody. – Bye everybody.