When Owners Don’t Make Money

As an investment property owner sometimes you have to hear things that you are not going to like.  And worse?  Things that will cost you money even though, truly, it shouldn’t be your responsibility.  Let me give you an example.

A rental property owner who had been using the services of a competing property management firm here in Kansas City came to me with their story.  Boiled down, the property manager moved in a tenant after screening that the owner believed to be pretty good. After a month the tenant started screaming about not paying rent and wanting out of the lease because they believed that the popcorn ceiling on their 60+ year old house had asbestos.

Asbestos scares people.  I’m not going to tell you it is safe or not safe.  You can look that up.  From my understanding, however, if it is not disturbed it is of no problem.  But if disturbed it can be potentially deadly over the long term.  Feel free to follow this Google search for more research on the subject.

Anywho, the rental property owner was a bit disturbed that his property manager seemed, at least in his eyes, to be working more for the tenant than for him, the owner.  Why?  Because the manager told him it would be better to just get the tenant out as soon as possible and get someone new in to the property.  Let them go (break the lease) and forgive them the 10 days of rent they still owed.

Well, both of those actions will cost the income property owner money, right?  Yes. But, the owner wasn’t collecting any money because the tenant wasn’t paying and apparently had no intention of paying. The owner and manager could have held to the letter of the lease but if they don’t pay now you have to initiate eviction which will cost for a lawyer, court costs, more missed rents and possibly damages.

On the other hand, if you can get them out by the weekend and re-lease the property at no charge you will lose about 45-60 days of rent and, probably, utilities.  In either case, you need that property back as quickly as possible to minimize damages, right?

After you get the tenant out then you may decide to pursue damages.  But, in my opinion, I support the actions of the first property manager.  Get the crazy tenants out.  I mean, who moves in and decides then that popcorn ceilings (which are on the ceilings of literally hundreds of thousands of homes across America) are all the sudden a danger?

Yes, I know it’s inconvenient and probably costly.  But this is property management.  This is what happens when you own income property.  This is why owning investment houses isn’t for everyone.  This highlights that literally every transaction with a tenant is different than the last.

 

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