In an ideal world, your experience with your McKinneyinvestment properties would be a smooth one:
Pipes would never leak
Appliances would run forever
The market value of your property would climb year after year
Tenants would pay the rent without fail, follow the lease fastidiously, and respond to communication in a matter of hours.
We all know that the real world is a bit different.
You can tackle maintenance problems with a little bit of elbow grease, planning, and outside help. Market analysis and some proper bookkeeping can keep you in the black—but tenants can be a whole different breed of trouble altogether. They are the engine that powers your McKinney investment properties—and when the engine breaks down, so does profitability.
Even the best tenants are human: and we all have our challenging days. However, there is a particular type of renter that can make investors want to think twice about investing in property. These predatory renters are often known as “Professional Tenants,” and take some special handling to understand and avoid.
While we've touched on them briefly before, in today's blog post, we're diving deep to warn investors about what they need to know.
What Is A Professional Tenant?
A Professional Tenant (occasionally known as a Professional Renter) is a tenant that goes well beyond the scope of a merely being challenging. They are not a tenant who fails to understand what you expect of them or who falls on hard times.
A Professional Tenant is someone who has made an effort to understand federal, state, and local laws and policies to exploit loopholes and technicalities for their benefit. This type of renter is out to game the system in any way that they can. They sign a lease for your McKinney investment properties with no intention of paying what they owe and can leave you on the other side of a lease term with thousands in unpaid legal fees, an empty unit, and months of back rent—and they've done it to other investors before.
How Can You Spot One?
Professional Tenants can be difficult to spot right away. They’re often veritable chameleons who excel at passing themselves off as excellent tenants and obscuring past misconduct. If you have a proper application and screening process, you can look at a few key red flags. You may find some "odd" things in their past, such as:
Unexplained or implausible gaps in their rental history
A history of evictions, legal actions, and late payments
Non-existant or falsified prior references
Unusually comprehensive knowledge of federal, state, and local landlord-tenant law
A financial history that features bankruptcies, collections, and poor credit.
One or two of these items shouldn’t have you too concerned. Many well-meaning and hard-working people find themselves out of work or struggling with debt. Applicants with gaps in their rental history may have lived with family or friends or traveled abroad.
Don’t read too deeply into every potential issue—but be alert to problems that occur in clusters. Professional Tenants will display several of these issues at once—and they are experts at glossing them over. You may also encounter one or more of the following tactics:
Paying in cash: This makes rent payments more or less impossible to track. A renter paying in cash can lie about payments or forge rental receipts with no records to refute their claims.
Paying partial rent: This type of tenant will often only pay a portion of their rent each month. Many state laws protect renters from eviction so long as a landlord accepts a partial rent payment. Many landlords are willing to believe a sob story or are unwilling to lose out on even a partial payment. As an expert McKinney property manager, trust us when we say: Professional Tenants exploit this.
Skipping late fees: Even if a Professional Tenant pays the rent in full, they may push off a late fee—claiming that they’ll pay another time. It can be easy for this type of tenant to wear down a landlord who will eventually write off habitual late fees in the interest of getting their rent payments.
How Can You Avoid Professional Tenants?
When it comes to handling this type of renter, evasion is your best bet by far. You can turn down a Professional Renter before they sign a lease to prevent the nightmare process of eviction with one of these self-taught legal eagles.
Your best tool for catching this type of tenant is a thorough screening process. Do the legwork necessary to protect yourself and your investment properties. Be sure to:
Perform comprehensive credit and background checks.
Verify employment history, past bankruptcy, and any legal records.
Interview your applicants in person so that you can get a better feel for their story and whether or not they are telling the truth.
Interview references! You’ll learn right away whether or not they’re legitimate and can get some valuable insight into your prospective tenants.
Keep good records (and hang on to them for a few years). Meticulous notes and files can help protect you in the event of legal trouble and may stop a lawsuit in its tracks.
A property manager will have the skills and resources to run an effective and extensive screening process to protect you and your investment properties.
They’ll know where to look—and what to look for—and can be your best line of defense against tenants who are looking to take advantage of you.
Professional Tenants know this and prefer to target individual investors rather than the combined might of a property management company.
Get In Touch With RentHub!
If Professional Renters are a concern for you—or you find yourself embroiled in trouble with one already—RentHub Property Management can make a difference. As an expert McKinney property manager, we can assist you with your tenant screening, record keeping, portfolio guidance, and many other tasks besides.
A great place to get started with RentHub is to put our free resources to work for you! As we've mentioned here, your first line of defense against a Professional Tenant is your screening process. Download our free Tenant Screening Checklist today! Use this as a vital tool to inspect your screening process for gaps that a Professional Renter could slip through and protect your investment properties!