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This is a very painful subject for those that already have bad tenants or have encountered them in the past. But it doesn't have to be this way. Even if you had problems in the past you can get good at letting and avoid problems in the future.
If you have the correct procedures in place, if you know what you are doing, you will not only have very few bad tenants but those you will have will run very fast instead of becoming squatters. And after all the worst is always a squatter, an absentee tenant may leave a few debts, which may be colleted in the future, but a squatter is a persistent problem that creates every month loss of income.
If bad tenants notice that you are smart and swift and don't give them
leeway, they also know you will chase them down because you have their
information the processes and the control in place. In this case most tenants
that have a bad intent won't last a very long - that is...... if they even managed
to get through you screening process in the first place.
But if you didn’t do the process correctly, from the beginning, you may
have to write off some bad debt from the past. We all have some
learning fees to pay. Ask me…. I paid mine in the thousands before I
got where I am.
Of course, nothing is
guaranteed, there will always be problems. If you are not willing to
face problems, you should not be in business. All business people will
have some bad clients, and when you do, you need to be prepared on how
to handle them and know how to chase them down.
Is it worth chasing tenants down for payments?
Sometimes it is, sometimes it is not – but if you have processed
your applications correctly for all the tenants you have, with all the
information – then you will have the means to trace them down, list
them so they won’t get rentals from others, put them on ITC and get a
collection company, to follow them and get your money
back.
In essence, it is all about how you handle your letting business, having the correct processes and acting on them without fail.
These are a few pointers on how to deal with your current bad or problematic
tenants. This does assume that you have been a landlord that has dealt
with the tenants legally and you have a good lease agreement to back
you up in case of need.
1. Do not give leeway to non-payment. Immediately communicate and ask for the missing payments continuously and consistently.
2. Act immediately and swiftly. Do not threaten to call the
Rental Housing Tribunal, instead call them if the situation warrants.
3. Act according to circumstances and do not exaggerate. If the
tenant is missing 50 bucks in the rent don’t threaten them to sue them.
It even sounds funny and they won’t believe you. Tenants are not
stupid.
4. Negotiate before you threaten – a lot of people threaten with
lawsuits real quick. This was never an effective way of getting
anything. Of course you will turn to the law if necessary, but do not
start off with such threats. Understand what the problem is and if the
tenant is in the wrong explain the law to them. For example: if a
tenant is committing an unfair practice by not paying the rent you need to explain this to them. Ask
them if they wish to be relieved out of their contract if they can no
longer afford the rental. In the workshop you will get processes to do
this legally and in a way that you the investor are protected and your rent lease is paid each month without fail.
5. If you see you are dealing with a professional squatter and
(we talk more about who these people are and how to identify them in
the workshop) turn to the law immediately.
These are some small things you can act on immediately, in the workshop we put the whole process together to create a clear picture of how to handle issues and what to do.
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