Are you falling in the perfect tenant trap?
I participate on Biggerpockets, Mr. Money Mustache, and on a military landlord forum. I love these places because I get to read and learn from a lot of great people while giving back. While reading from others on these sites, I have noticed a huge myth, and honestly it feels like a dark hole that landlords fall into.
What’s the Myth?
I’ve heard so many landlords say they don’t want to do something because they don’t want to lose their perfect tenant. I call this the perfect tenant myth.
Before we discuss why I cringe (and boy, do I cringe — like nails on the chalkboard!) over this myth, let’s talk about what the perfect tenant is.
A perfect tenant does the following:
- Pays rent on time
- Doesn’t damage your home
- Takes good care of the home and fixes the basic things (batteries in the smoke detector and filters — read more here)
Here’s my question to you: Isn’t that their responsibility as a tenant?
Should you have to reward a good tenant at the expense of your business? Aren’t you allowed to expect that from a tenant? Yes, you want to keep good tenants, but it is also important to remember what is expected of your tenants too!
Furthermore, do you really know how great a tenant is until they leave? I know I don’t. I can tell you my seemingly best tenants have truly been some of my absolute worst.
The Myth Debunked
Let me tell you a story. I had a tenant that was quiet, paid early, and even fixed the issues (oh, and we generously paid them for the inconvenience) themselves. This was one of my first tenants, and at the time, I would have told you they were amazing!
They gave me 10 days notice that they were moving out. And they did so much damage that I only returned less than $10 of their deposit, and I still had to fix things and paint because of the damage! I should have charged them way more, but I didn’t.
Here’s another time the perfect tenant wasn’t so perfect. I had tenants that signed an 18-month lease and paid on time every month. They were even interested in buying the home.
They broke the lease 4 months into an 18-month lease. They left the lawn DESTROYED, didn’t clean the carpets, and left junk everywhere.
I could go on and on with even more stories that I have seen on different sites from other landlords. “They are great tenants because X, Y, Z … I don’t want to do X because they might leave.” Oh, by the way, they are closet smokers. (AAAAACCCKKK!!)
Other say, “They are great tenants. Do I charge them for X repair?” Oh, by the way, they have already had two other repairs that they caused and I have paid.
For me at least, in reality those seemingly perfect tenants were my worst! Honestly, I have good tenants, but none are perfect. I could give you stories about every single one of them. And, oh, by the way, I am sure every single one of them can find fault with my landlording style. That’s not the point.
The point is is you really don’t know what kind of tenants they will be until they leave. When you get the house back, do your inspections, and have the next tenant move in is when you will really discover if they should fall under the perfect category of tenants. That is when you will find out if your quiet and nice tenants will be one of those awful stories or the one that you felt drove you crazy with stupid requests was the best tenant you ever had!
This leads to a problem: You don’t know any of this when you are deciding whether or not to increase a tenant’s lease at renewal. Or when you decide to reduce the rent to keep them when they really have broken every appliance possible or at least it feels like it.
Some people do inspections every 3-6 months and this helps them gauge their tenant’s status. That being said, it only takes one bathtub overflow to do thousands of dollars in damage.
I personally take a different approach. Instead of trying to identify the perfect tenant, I practice the philosophy of all tenants are created equally. I raise the rents at renewal and require them all to pay for any damages, etc. I don’t treat anyone differently because I don’t want to lose them. Because, honestly, the perfect tenants that I totally wanted to lose were some of my best in reality.
There is an added bonus — if you treat everyone equally and don’t change the rules for anyone, you are also following Fair Housing Laws.
What do you think of the perfect tenant myth?0