Real estate has allowed me to attain financial independence. Real estate can be the ideal investment vehicle with the right systems, processes, and team.
However, being a landlord is not for the fainthearted. Landlords are inevitably going to run into issues from time to time. To become successful in this business, you have to roll with the punches and learn from your mistakes.
If you’ve been a landlord for several years, you’ve more than likely had your fair share of challenges—from dealing with tenants, to addressing maintenance issues, to recognizing you made a bad investment decision, and more. The landlord horror stories below might scare you away from the business. But I will point out key takeaways so you can avoid these scenarios and grow your wealth through real estate investing.
Bad Tenants, Good Stories
Before becoming a landlord, I strongly suggest you spend a day in housing court for landlords and tenants. Believe it or not, over the years, I’ve seen the following situations either directly or indirectly:
- Tenants who broke into a house after they had been evicted from it.
- Tenants who manipulated landlord-tenant laws to avoid paying rent for many
months. - Tenants who failed to pay rent, resulting in the landlord failing to pay property
taxes. Net result? The tenant buying the house at a tax sale. - Tenants who stole the hot water tank when they move out, then sold it.
- Tenants who put concrete in the toilets.
- Landlord who evicted a tenant whose rent was $0.
- Tenants who were evicted from one unit in a building and walked right over to
their friend’s unit in another part of the building. - Tenants who fought consistently, called the police regularly, and exhausted
their neighbors’ patience. - Tenants who stole electric and water utilities.
- Tenant who threatened to burn the rental house down.
- Tenants who left in the middle of the night, abandoning pets in the home.
- Tenants who bred dangerous animals in their homes.
- Tenants who had barbeques and cookouts in their homes.
- Tenants who were hoarders.
- Vacant homes that were vandalized and damaged.
- Serious, violent crimes—like a tenant who was killed by their roommate.
- Tenants who used the house as a drug haven, resulting in the house being
raided by a SWAT team.
The Best Way To Avoid Bad Tenants
Good tenants are worth their weight in gold, because bad ones can do more damage than you realize. That’s why screening rental applicants well is the single most important step when placing tenants.
While some repairs will be expensive—and some will be unexpected—setting rules, outlining them within the lease, and sticking to them can help mitigate tenant issues and protect your property. Also, keep in mind: it’s easy to get someone into your home. It’s much more difficult getting them out once they are in.
Summary
Buying rental properties has been an excellent choice for me. But I’ll admit, being a landlord isn’t for the faint of heart. Sadly, a handful of bad tenants—or even just one awful one—can completely foil your dreams of achieving financial freedom through real estate.
The everyday headaches of property maintenance are one thing. But you either have the stomach to deal with unthinkable circumstances and incredible hassles or you don’t—there is no in-between. For a lot of people, the risks are just too great.
Let’s face it, dealing with evictions, arson, and unpredictable behavior isn’t everyone’s cup of tea (no matter the income potential). If you’re considering investing in real estate, you should know what you’re getting into. The rewards can be great, but the reality can be downright crappy.