Top 10 Pain Points for Landlords and How to Fix Them

Written on September 24, 2014 by , updated on April 13, 2015

Pain PointsBeing a landlord can be incredibly profitable, but also very difficult at times.

I don’t know about you, but my properties aren’t exactly on Easy Street.

Over the last 10 years, I’ve experienced many of the issues that plague owners, and cast fear into the hearts of wanna-be landlords.

Through endless reading, trial and error, and tenant feedback, I’ve learned that almost every rental problem has a solution.

Based on my experience, here are the top 10 pain points that most landlords will eventually experience, along with ways to fix or prevent them.

1. Loss of Rent/Income

  • Vacancy
  • Rent Default (Tenant Stops Paying)
  • Tenant Hold-over (Tenant Won’t Leave and Won’t Pay Rent)

Solutions:

  • To reduce vacancy, start listing your units for rent 60 days prior to the end of the current lease.
  • Screen your tenants better – make sure you don’t let a deadbeat or a scammer into your property.
  • Terminate the lease immediately for nonpayment – with proper notice for your state, of course.
  • Learn about your local eviction process, and be ready to file the paperwork immediately after lease termination.

2. Eviction

  • Court Costs of Eviction
  • Strict Legal Rules for Eviction
  • Tenant Retaliation by Damaging the Property

Solutions:

  • Require a large security deposit (1-2 month’s worth of rent, depending on what is allowed in your state) at the beginning of the lease to alleviate potential expenses of court costs and damages.
  • Learn about your local eviction process, and be ready to file the paperwork immediately after lease termination.
  • Include a clause in your lease that mandates court costs and attorney’s fees be paid by the prevailing party.

3. Stress of Property Management

  • Cleanliness of Tenants
  • Unintentional/Intentional Destruction of Property
  • Illegal Drug Use
  • Lawsuits
  • Chasing Down/Collecting Rent
  • Tenants Lying to You
  • Noise and Nuisance Complaints
  • Dealing with Disgruntled Neighbors of Your Rental
  • Police/Domestic Violence Issues
  • Ensuring Tenant Satisfaction
  • Ensuring an Unbiased and Fair Screening Process

Solutions:

  • Find a rock-solid lease and stick to it.
  • Stop by or drive by the property at least once a month.
  • List the tenant’s cleaning responsibilities in the lease.
  • Put everything in writing (or email).
  • Ask the neighbors to call you first, whenever there is an issue.
  • Don’t be afraid to call the police.
  • Find a local landlord-tenant lawyer and build a friendship with him or her, before you actually need an attorney.
  • Use an automated tool, such as Cozy, to accept applications, screen tenants, and collect rent online.

4. Stress on Personal Life/Relationships

  • Spouse or Partner Worried About Finances
  • Always Being On-call for Rental Issues

Solutions:

  • Include your spouse or partner in the financial decisions and respect their opinion.
  • Keep a three- to six-month emergency (or vacancy) fund for each property. Yes, it takes a while to build that up, but you’ll sleep better.
  • Ask your tenants to report issues via email or text, which only takes a second to review. If it’s urgent, you can deal with it immediately.

5. Tenant Turnover

  • Trying to Find a New Tenant
  • Cleaning up After a Previous Tenant
  • Feeling of Rejection When Prospective Renters Don’t Want to Rent Your Place
  • Exhaustion from Showing a Unit Week After Week
  • Handling, Storing and Disposing of Abandoned Personal Property

Solutions:

  • When looking for new tenants start early, while the unit is still occupied.
  • List your units for rent 60 days prior to the end of the current lease.
  • Refresh your listing on Craigslist every three to five days.
  • Don’t sweat the clean-up, just hire a maid service and deduct the cost from the deposit (excluding normal wear and tear).
  • Schedule showings back-to-back, every 30 minutes, in a four-hour block on a Saturday. I call this “The Landlord’s Open House.”

6. Repairs

  • Knowing When to Do It Yourself and When to Hire a Pro
  • Finding and Evaluating Qualified Contractors

Solutions:

  • Create a handy tool bucket that you can keep in your trunk.
  • Your rentals will provide great opportunities to learn basic handyman skills, but don’t get in over your head. I’ve made small leaks much worse because I didn’t know what I was doing.
  • Buy an all-purpose DIY book, and skim through it regularly. Keep it in your car, so you always have it nearby.
  • Ask to observe every service professional that comes to your property. You’ll learn a lot through observation.
  • Research contractors on Angie’s List, Handy (formerly Handybook), Yelp, and the Better Business Bureau.

7. Compliance with Laws

  • Obtaining Business Licenses and/or Landlord Registration
  • Understanding Landlord-Tenant State Laws
  • Knowing Landlord vs. Tenant Rights

Solutions:

  • Don’t try to circumvent the government. You may get away with it for a while, but eventually it will catch up to you.
  • Learn your state’s rental laws.
  • Join a local landlord association, rental housing association, or real estate investor association to network with other landlords.
  • Attend landlord training in your city. Landlordology provides free guides and occasional online webinars. Join our newsletter to stay in the loop.

8. Adequate Insurance

  • Insuring Each Property
  • Insuring Against Rental Income Loss and Lawsuits
  • Insuring Your Portfolio

Solutions:

  • You might get a better rate if you insure all your properties with a single provider.
  • Inform your provider that your properties are rentals, and not homeowner occupied (critical!).
  • Sign up for “Fair Rental Income Protection” in your policy to cover the rent during a covered loss.
  • Make sure you have proper coverage.
  • Consider getting “umbrella” insurance to cover excess liability and risk not covered by the individual policies. An umbrella policy will insure your entire portfolio, not just your properties.

9. Leases

  • Finding a State-compliant and Bullet-proof Lease
  • Explaining Lease Clauses to Tenants
  • Knowing Whether or Not Your Lease Will Hold up in Court

Solutions:

10. Finances

  • Keeping Track of Security Deposits
  • Calculating Interest on Deposits
  • Commingling Funds

Solutions:

  • Keep the security deposit in a separate, interest-bearing bank account.
  • Open a separate security deposit bank account for each property.
  • Collect and give interest on the deposit money if you are required to by law. If the statutes don’t regulate interest, just give the tenant all the interest that is accrued.

BONUS: Taxes

  • Keeping Track of Income and Expenses
  • Calculating Depreciation
  • Sending out 1099s to Contractors
  • Deciding to DIY or hire a CPA

Solutions:

  • Use an all-in-one property management software that lets you track income and expenses. If not, there are other great tools, like Freshbooks, Excel, and Quickbooks.
  • Property Managers (not landlords) who pay a contractor more than $600 in a given year, must send out 1099s. Some tools like, Buildium and Appfolio can make this task easier.
  • TurboTax can easily prepare and file the taxes for most small landlords. If you have multiple business entities, joint ownership, or tax shelters, then you should probably hire a CPA.

What’s Missing?

What pain points have you experienced as a landlord, but is not mentioned on this list? How’d you handle them?

Let us know in the comments below.

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15 CommentsLeave a Comment

  • diana mills

    what are your thoughts about leasing to section 8 housing leasing.

    • Lucas Hall

      Hi Diana,

      In many states, you cannot discriminate due to source of income, but in other states, participation in the Section 8 program is completely voluntary, and landlords are not required to participate.

      I tend to lean towards the simplest solution. The Section 8 program add a lot of extra paperwork and doesn’t make my life easier because of the bureaucracy – so I don’t participate in the section 8 certification process, unless I’m forced to. It really has nothing to do with the tenants themselves. There are bad eggs in every type of people group – you just need to know how to weed them out.

      If you participate in the program, just screen those applicants the same as anyone else.

  • Parrish Properties

    I tried to sign up for Cozy and got a message that “something went wrong, try again.” So, I can’t sign up. Any suggestions?

  • Sarah

    Thanks for this! I’m not a landlord (yet) but am saving this for when I become one – hopefully within the next two years. I figure it’s best to learn all I can now before diving in!

  • Angelina

    Lucas,
    I’ve recently started renting to tenants who call at least once a month about “yet another issue”. While some are valid, others not so much. Their latest issue is regarding the window in the kitchen. The window is 1 bigger one with 2 smaller ones on either side of it. while one of them opens, the bigger one and the other smaller one do not. This has been the case since before I even moved in. I have said if it’s a simple fix i will do it but if it requires more than that I will leave as is since the one window opens. This is not a brand new house and is bound to have issues. He wants to consider it a “safety hazard” if it is not fixed. Question to you: does it need to be fixed? the kitchen has a fire extinquisher and an exhaust fan and one part of the window opens. Do i have to fix this? I want to handle this professionally and maintain a good relationship while not being bullied.

    • Lucas Hall

      Hi Angelina,

      Generally speaking, a landlord is responsible to fix issues of safety and habitability. A landlord should also maintain the same level of service as when the tenant moved in.

      The only reason why I would think that a stuck window could be a “safety” issue is if there weren’t any other forms of exit in that room. But even so, typically only bedrooms need to have 2 forms of egress – not kitchens.

      I’ve had to deal with tenants who call about something every few weeks. In my opinion, the best course of action is to say “thanks for letting me know. I’ll assess the issue and decide if action needs to be taken”. These types of tenants are good to have because they really care about the property, but they also think (if ever so slightly) that you need to fix every little thing – which is not true. Just be honest with them, and say that you are responsible for safety and habitability. Everything else is at your discretion. Eventually, they back down, but they might resent you a little. The reality is that you’ll never really make a princess happy, and you should just keep things nice as long as possible until they move-along – but don’t give away the farm!

      Anyway – that’s my opinion as an experienced landlord. You should check out our state law guides to see what you state says about Landlord responsibilities: https://www.landlordology.com/state-laws.

      Please know that I’m not a lawyer, nor is this legal advice. Good luck to you!

  • Angelina

    Thanks so much Lucas! It’s hard to find information like this. Your website is so helpful!

  • James

    Hi there, could you tell me how you’d use Cozy and Freshbooks together?

    I see you mentioned them, which was exciting, because these are the two platforms I’m considering using instead of Buildium (who I’ve been with for a while).

    Many thanks!

    • Lucas Hall

      Hi James

      Great question. Cozy will currently track rental income. Expense tracking is a feature that is on Cozy’s roadmap, but is not currently available. Freshbooks has a very basic expense tracking feature, which is all you really need as a landlord. You could also use a spreadsheet. Once Cozy adds in expense tracking, then you’d be able to do it under one roof, but until then, you’d have to use two separate programs, or pay a minimum of $45/month for a tool like Buildium which already has it built in.

      I too was with Buildium for about 5 years, and then I found Cozy. It’s simple, powerful, and free. Now, I can take my wife out for a nice steak dinner instead of paying for property management software :)

  • Nanette Reimer

    Lucas: I have been a landlord for 15+ years, and have learned so much from just browsing your website in the last 2 – 3 months. Your tips will make my life so much easier in the years to come. I have learned valuable lessons and tools to implement in the future, beginning with my next tenant. THANK YOU for providing such great advice! :-)

    • Lucas Hall

      HI Nanette,

      Thanks for the feedback! It’s great to meet you! I’m glad you’ve found it useful. I believe that we’ll all succeed if we stick together.

  • rick

    Hi

    Great info…

    Is there a book out, downloadable or apps to deal with this..or a hotline ?

    Am interested to find out more info availability

    Thanks

    Rick

  • Stephen Parsons

    In California
    I served my tenants with an eviction notice provided by my lawyer.
    If I put the rental on Craig’s list and they stay past the date they are required to vacate what recourse do I have?
    In their month-to-month rental agreement they had no security deposit, what recourse do I have if there is damage to the rental?
    I’m considering a rental agency to manage some of the landlord responsibilities, do you do that or have any recommendations?

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