When it Doesn’t Work out Well….

When it Doesn’t Work out Well….

Across our 350+ managed properties, 98% of the time the rent is paid on-time, the tenants fulfill their lease term, the property is maintained in good condition, and the landlords are happy with the performance of their investment property.


For the other 2% of our managed properties, there is a workload increase for our staff and a financial and/or emotional strain on the landlords. Our tenant selection criteria, along with our management practices, nearly always results in a smooth landlord experience. However, because “life happens”, I do want to share some of the less positive experiences so that new landlords have a realistic expectation of the risks associated with transitioning their homes into rental properties.


This month, we received an email from one of our tenants informing us that he had vacated the property halfway through the lease term. “Mr Smith” had lost his job, so he packed up his family and moved back to Ohio to live with relatives. With no notice, “Mr Smith” left the keys on the counter, left a refrigerator full of food, left several truckloads of personal property, and left the landlords with an empty house. While the lease requires the tenants to continue to be responsible for rent until a new tenant is procured, it will be difficult for the landlord to collect rent and other damages from a tenant who is unemployed and now out of state.


This summer, tenants at another of our managed properties did not move out as scheduled at the end of their lease. The couple was separating and not taking good care of the home, so the landlord decided not to renew the lease. The husband moved out, but the wife, who was a homemaker, did not have the resources to rent another property, so she and her kids just stayed in place after the lease ended. These tenants were considered “hold over” tenants. The owner incurred legal costs associated with evicting the remaining tenants and lost the benefit of keeping the home on the summer rental schedule.


One final example of a less than positive landlord experience occurred this year when a landlord moved back into their home after having rented it out for 2 years. While the renters did not intentionally damage the home, the wear and tear was significant enough to exceed the tenant’s security deposit. In such cases, the owner must decide if they’d like to take legal action to attempt to recover the additional damages.


While the vast majority of our landlords sell their home, move back in, or maintain a long term rental property with minimal vacancy, standard maintenance costs, and no legal fees, I do want all new landlords to be aware that with any rental property risks associated with early termination, holdover tenants, or tenant damages do exist.

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