Risks of Long-Term Renters at Your Property
Negatives to Consider When a Tenant Renews Their Lease
Landlords do not want to have to deal with vacancies at their rentals, but there are certain times it is better to see a current tenant move out than have them renew their lease agreement. Tenants who are paying below market rent, those who complain frequently or those that are causing excessive wear and tear on the rental are examples of renters a landlord may prefer to say goodbye to. Here are five risks of long-term renters at your property.
1. Difficult Tenants
There are tenants who are not actually breaching any terms of the lease, but you almost wish would so you could get them out of your property. Every time their lease comes up for renewal, you are hoping to see a notice from the tenant stating that they will be moving out.
These are the tenants who complain constantly and demand that you drop whatever you are doing to address their urgent issue. Their urgent issues are usually minor problems or nonexistent. These tenants also get into arguments with other tenants at the property
Self-help evictions are illegal. So as long as the tenant is paying their rent and following the terms of their lease, you will just have to deal with them until they decide to move.
2. Limits on Rent Increase
In most states, you are only allowed to increase a tenant's rent upon lease renewal. A tenant who has lived in your property for a number of years may be paying less than the current market rent for the apartment. If the tenant is a good tenant who always pays their rent on time and never complains, you may be willing to accept less rent for fear that a rent increase would cause the tenant to move.
In order to increase a tenant’s rent, you also have to make sure you follow your state’s landlord tenant laws to do so. You will usually have to notify a tenant in writing before you can increase their rent. You also can only send this notice at certain times, such as 30 days before their lease is set to renew.
3. Put Off Maintenance on Unit
Another negative that occurs when a tenant stays in the rental property is that it is difficult to assess the condition of their rental unit. When a tenant moves out, you have to turn over the apartment for the next tenant. You make a list of any damages, replace items as needed and fix any damage to the unit.
When a tenant stays in the rental unit, especially for a number of years, if the tenant does not complain about an issue, you will not be aware of a problem until it becomes something bigger. Small issues, such as a few missing roof shingles, which could have easily been repaired, will turn into big problems, such as an actual roof leak.
4. Tenant Rejected From Other Apartment
A tenant may renew their lease due to a recent issue that you may not be aware of yet. This issue would easily come up if a new landlord performed basic screening on the tenant. This could be a job loss, a decline in their credit score, or even a criminal conviction.
Since landlords do not usually re-screen current tenants upon lease renewal, you will be completely unaware that this tenant could become a problem in the near future. Even if they have always paid their rent on time, due to a job loss or medical bills that put them in debt, they may soon begin paying their rent late, and then not at all. Not only will you no longer be collecting rent, but you will then have to go though the lengthy eviction process to get them out.
Even if you are not going to go through your complete screening process every time a tenant renews a lease, it is a good idea to at least run their credit again. You can then compare this credit report to the report you received when the tenant first moved in. You will want to see if their credit score has noticeably declined or if they suddenly have a large amount of debt.
5. May Let Rules Slide
When you have a long-term tenant, you become more comfortable with them and you may begin to let the rules slide. For example, you may have charged a late fee at the beginning of their lease, but may have begun waiving that fee recently. Once you have bent the rules, it will be difficult to enforce these rules in the future.
If you do not follow the law, if you have any problems with the tenant in the future, you will likely lose any case against the tenant in court. It can be difficult, but you must maintain a professional landlord-tenant relationship with all tenants, regardless of how long they have been renting from you.