Being a landlord is not for the fainthearted. To become successful in the business you have to learn from your mistakes. Landlords are inevitably going to run into some issues from time to time. Whether that is maintenance issues, tenant related, acquiring an undesirable property or all three, you have to learn to roll with the punches and learn from each mistake to make your business successful.

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If you’ve been a landlord for several years, you’ve more than likely had your fair share of experiences whether it’s dealing with tenants, a maintenance issue gone out of control, or making bad investment decision. Here to tell you some of their horror stories and how they survived them are some of the best landlords in the business.

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Unwanted Guests

Michael Cheng from Archers Homes

What is the worst thing that has happened to one of your properties?

During a two week period when one of my rental homes was vacant between tenants, vandals broke in and flooded the house. They plugged all the drains and ran the water on all the bathrooms on both floors. When my neighbors saw the water running out the garage, they called the police. Then the police called me a few hours later, about 2am, to let me know.  Finally, they got in an emergency water mitigation crew to actually turn off the still running water and start drying out the house overnight.

 

How did you react when it first happened?

I confirmed what happened with the police and made an immediate call to my insurance company to file a claim. 

What did you do to fix it?

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I got an adjuster to give me an estimate and the insurance company sent me the settlement check.  After paying off the exorbitant charges of the emergency water mitigation service, I sent in my regular contractor crew to do the work. I ended up spending a night to paint the house to get it ready for rental. The home looked as good as brand new. It was leased about a week later.  

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KEY TAKEAWAY

One of the risks of owning rental property is tenant turnover and extended vacancy periods. The longer a property is vacant, the more costs add up and in Michael’s case, he had to deal with vandalism costs, as well. In order to minimize rental property vacancies, keep in mind market conditions in the area you are considering.

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Bug Filled Couches and Broken Windows

James Wise from The Holton-Wise Property Group

What is the worst thing that has happened to one of your properties?

Where to start? There are so many stories to choose from. We had a 3 story apartment building in Cleveland, Ohio. One night during a rainstorm the 2nd story tenant is calling the line frantically. Over and over again. Because a couch came crashing in through her dining room window. (Yes the 2nd story window) Apparently the tenant on the 3rd floor found out they had bed bugs and they decided the smartest way to fix it was to go ahead and throw the couch out the window. As it fell down it turned and crashed into this woman's window below.

How did you react when it first happened?

We have over 800 rentals in our portfolio. In the beginning when crazy things would happen we would get upset and wonder how these things could happen. At this point we just kind of shrug it off or laugh. We are pretty numb to it. We have seen everything from serious violent crimes to tenants stealing the hot water tank when they move out, tenants breaking into the house after they have been evicted, tenants putting concrete in the toilets, tenants getting evicted from one unit in a building and just walking into their friends unit in another part of the building, tenants fighting, tenants stealing power from one another, one tenant threatened to burn my house down etc....

What did you do to fix it?

You can never totally eliminate or fix all problems. It's the rental business it comes with the territory. If it was super easy we'd all do it and we'd all be rich. You have to roll with the punches and do your best to mitigate your risk. You mitigate your risk by doing things like screening tenants and using a professional management company.

 

KEY TAKEAWAY

With more than 800 rentals in your portfolio, issues are imminent. In James’ case, he was forced to deal with a lot of bad tenants over the years, sometimes having to resort to eviction.  Evictions can be costly. Once you add legal fees, court costs, damage etc. costs can range anywhere from $3,500 - $10,000. Aside from the cost, the process can be time-consuming. Time is money and the more time you spend evicting tenants, the less time you spend on more efficient endeavors. Like James said, one way to avoid tenant eviction is by screening tenants or hiring a property management company.

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It Started Out as Just a Leak...

Domenick Tiziano from Accidental Rental

What is the worst thing that has happened to one of your properties?

The biggest problem I've had as a landlord was when I let a small hot water heater problem become a major issue. I own a tiny condo and in order to accommodate a washer/dryer, it can only have a tankless water heater. Tankless water heaters are notoriously complex systems and require specialized service. I had one unit that was experiencing issues (e.g., shutting off while the tenant was in the shower). I had it quickly serviced and thought that was the end of the problem. A few weeks later I got a call from the owner below saying there was water leaking into their condo from my unit.

How did you react when it first happened?

Of course I panicked. I contacted the tenant who was out of town (of course) so I grabbed the keys and rushed out to the condo to shut off the water not knowing what to expect. When I got there, I found a small but steady leak from the water heater but no standing water in my unit. The unit below had a steady leak of dirty water coming through the ceiling. 

What did you do to fix it?

I immediately shut off the water to my property and called a few professionals to see who could fix it quickly. Unfortunately, it was a holiday weekend so it was a couple of days before I could get someone who knew how to service a tankless water heater out to my rental. I ended up having to expedite a replacement and deal with both the upset owners below as well as an upset tenant who didn't have hot water for days. It ended up costing me much more than had I just replaced it when the issues first started. Because I have always been very responsive to all issues, my tenant was understanding but I did have to give a sizable rent concession to make up for their loss of use. 

Lesson Learned: Always properly maintain household systems and replace anything you suspect is past its useful life!  Also, be responsive to your tenant. Offer a concession if they've been put out. It will help create a lot of goodwill and a loyal tenant.  In fact, my tenant is still living there despite this issue.

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KEY TAKEAWAY

Maintenance issues are an inevitable risk of owning rental property. If you decide to ignore small issues, they will only grow into bigger problems down the road.  A good industry standard is to purchase properties that are less than 15 years old and perform regular inspections to stay current on the condition of your property. Insurance may cover some costs, but not everything, so set aside a portion of each rent payment to help cover any unexpected maintenance issues you may come across in the future.