On the opposite end of the spectrum from the desirable tenants that we all want, there are "the other people".

What tactics do you all use when renting to deadbeats? The no hope folks. The last chance people.

These are the ones who live in the properties that you are afraid to admit you own.

Some people seek this tenant as a niche and it isnlayer by a whole different set of rules than what we discuss here most of the time.

My tax deed house for example has a deadbeat in there who I know will need constant management. If she leaves, I will be seeking another manageable deadbeat for this unit, because I'm not putting any money into this house other than safety.

So what are the low end tactics?

NE I don't have any property's i'm embarrased about. My heart doctor on the other hand said he won't even drive by his property's because he's so ashamed of them. (someone manages them for him)

I hear what you're saying...

I try to run a tight ship, but I agree with you NE that some of the folks on here who run very tight ships probably don't own some of the types of houses we do. I have a few that are Class C-.... I keep them safe, functional, and clean, but the applicants usually have bad credit, some criminal past, semi-stable jobs (or other), and no LL refs (living with parents).

Like myob says, I look at income first...LL refs next...criminal next. Basically, all my criteria apply as usual, but I know in my heart that probably 1 in 5 will end up being evicted or will do a midnight move-out before the 1st year lease is up. It's just part of the deal with this crowd.

Others have encouraged me recently to find better properties, and I'm considering selling a few dogs and trading up into legit Class C/C+ hoods. Maybe even a B-. I like the cash flow off of these, but the management is definitely more intensive. The good news is once I FIND a decent one (i.e. the 4 of 5 who don't get evicted or midnight move out), they tend to stay because they actually are decent folks and they're tired of being worked over by the scumlords.

There aren't many LLs who invest in the market I do AND who try to do it the right way. It's a challenge, but on the balance it works out.

I don't think we have anyone anymore that is that type. Even our crappiest properties in the worst neighborhoods are fixed up enough to attract decent long-term tenants.

When I knowingly rent to a dead beat I pay close attention to this tenant. As soon as something is amiss I check it out to see if they are in violation of the lease. If the rent is a day late they receive a notice and I usually I get them out before the end of the month and before they use up the security deposit.

I think your referring to My "Project House".

I could write a Book on the characters that have

come and gone through that one. (Built in 1900)

"Ya put the Lime in the Coconut"...............

you collect rent (in person) per the schedule of their income...not the various payment plans that the upcharges make the landlord money but $500 divided by 4 = $125 a week cash.

you become their "friend" ... yes, they will try to get over on you and lie when their mouths open but you learn to figure out enough of the truth.

you spend time at the property doing "something".

NE - I seem to recall you don't like interaction with tenants ... this very lower end require constant attention.

Yesterday I gave a lady potting soil (taken from an empty place) and two brand new flower pots (taken from the empty place)... gave her two packets of flower seeds I had left over from last year and you would have thought I was the Easter Bunny, tooth fairy & Santa rolled into one.

Would she $crew me over if given the chance? absolutely but because I'm working in the neighborhood daily, I see the comings and goings and know that the husband, who was always there all day long, is now (at least his vehicle) gone a lot. I will casually bring this up in conversation in a round about way so I'll know if he actually has a job or is gone and only comes back to see the kids and to "visit" her.

you see their garbage level ... is it consistent weekly.

you see any immediate damage.

And when it's time for them to go? They will absolutely go without paying but you won't have malicious damage because you've treated them right.

place I'm working on now - needs flooring desperately. We tacked down marine carpet and put left over metal transition strips in places they shouldn't have been. Looks tacky as can be. Lady from down the block came up to look at the progress and gushed about how wonderful it looks ... because it's new. I asked her opinion on kitchen paint ... I only do kitchens in green or yellow so it didn't matter that she picked the yellow. Wait until she sees the yard sale curtains go up tomorrow! I guarantee she is my biggest cheerleader on the street gushing about "oh, how nice Miss Nicole makes her places" ... and she doesn't even rent from me.

I don't do well in this sector. The buy-here-pay here car dealers have some interesting methods/measures.

The salesman is also the collector. The salesman handles 70 customers.

The salesman manager measures "recency" which is how recently have you had contact with customer? They require contact-in person/phone/text every 48 hours.

I don't deal with them

But someone has to provide housing for them and I know there is money in it. Houses can be purchased cheap in bad areas with rent levels that are pretty generous considering how much the house cost.

In ontario I would not and do not touch that market under any circumstances. Landlords here dont have the protection that you guys do.

A deadbeat tenant here can literally cost an ontario landlord tens of thousands of dollars with little hope of ever collecting on a judgment.

I think you already know that all you really can do is protect yourself the best you can under the circumstances. You collect as much deposit and prepaid rent as possible up front and keep a tight reign on them. You give yourself that extra bit of financial cushion however you can get it to soften the inevitable shortcoming when it hits.

If the property needs to be fixed up, then why not invest in it? Why wouldn't you want to own property in which you can be proud?

My best advice is to raise the bar on yourself regarding how you take care of your property.

If your customers are truly financial "deadbeats", then stop allowing them to live in your properties. Raise the bar on how you expect your tenants to follow your rules. Take the lead and encourage the tenants to follow along. Screen applicants better.

Some time back, our family bought a 23 unit apartment building. We put 25 percent down in the purchase, and in doing so, we got seller carry back financing under very favorable terms. Our first year was a really rough one. The units were occupied with a mix of class B and C tenants, all on month to month leases, and the rents were artificially low. When we took possession, we immediately raised rents close to market. And what was to be expected, some moved out immediately; most of the rest followed suit eventually afterward. In that first year, we had 22 out of the 23 units turnover. The replacement tenants mostly was comprised of class C tenants. The typical household was the welfare queen in charge of three unruly kids, and needed a live-in boyfriend to assist her with the rent. If Should I be around the building grounds performing some maintenance work, and witness a domestic dispute where the boyfriend stormed out, I knew right there and then that no rent was forthcoming next month. It wasn't uncommon for me to be handing out a quantity of 5 to 7 five day notices each month, and filing about 3 eviction actions each quarter. This was, without question, a numbers game. I had to practically be hands on to watch things there daily.

When we first began we bought one property that we thought would be iffy. Turns out that was a gross understatement. My first clue was when none of our contractors would go to the property without taking a gun. Today that property is an A.

Referring to our tenants at that property in the first 5 years as deadbeats is an insult to deadbeats. The church across the street called to tell us the tenant was dealing drugs out of the house. My attorney wanted to file for an emergency eviction hearing and I actually told her to wait a few weeks hoping it was a meth lab and that the tenant would blow up the house with him in it just to get rid of the property.

That single experience turned me off to anything less than B class properties. Aside from the liability and the constant repairs after each and every tenant was evicted the amount of time and effort and aggravation just wasn't worth it to me.

I prefer the better quality tenants that don't require me to hand hold them every minute, understand how to abide by the rules, know how to pay rent on time and take care of the property. Are they perfect? No. But if it's perfect that I want this is the wrong business for me.

GKarl - word of mouth. after my first purchase of a little row, I was approached by an elderly man the next alley over. these folks were born and raised in these houses and they are in their 80s and 90s. with my first group of inherited tenants, I painted the front doors my signature purple, gave them a gift basket that included 13 gallon trash bags they could use rather than grocery store bags, I used the weed eater along the fence lines, flower pot on the front stoop (not a porch, just a little cement step), etc. I "forgot" to take my broom with me. they have been renting there forever. I assured them I wasn't raising the rent. On the owner occupied, I did a minimal amount of cosmetic. Painted, new ceiling, new flooring, painted the cabinets and put in a new bathroom toilet and sink. the elderly is my target tenant here ... I can't have any baby mama drama.

to put the $10,000 needed into these places to make them "decent", would be futile. No way could I raise the rent (and get it) more than $100 a month ... that's a lot of years to just come out even ... and then they'd be in bad shape again.

That's very interesting Nicole and as I'm reading this, I'm forced to compare my regular rental tenant pool which I thought was "C" that I would now characterize as C+. Here's the thing though--a broad swath of the American public can probably be characterized as C or C-. That's where the housing need is and that demand is steady. There's nowhere for many of these guys to go and in a downturn, the number of these people will only grow. In the absence of a downturn, the demand is still steady. If one is set up to manage this, which seems to be the case with you, there's money to be made. The housing can be bought cheaply and the folks need it.

That's very interesting Nicole and as I'm reading this, I'm forced to compare my regular rental tenant pool which I thought was "C" that I would now characterize as C+. Here's the thing though--a broad swath of the American public can probably be characterized as C or C-. That's where the housing need is and that demand is steady. There's nowhere for many of these guys to go and in a downturn, the number of these people will only grow. In the absence of a downturn, the demand is still steady. If one is set up to manage this, which seems to be the case with you, there's money to be made. The housing can be bought cheaply and the folks need it.

That's very interesting Nicole and as I'm reading this, I'm forced to compare my regular rental tenant pool which I thought was "C" that I would now characterize as C+. Here's the thing though--a broad swath of the American public can probably be characterized as C or C-. That's where the housing need is and that demand is steady. There's nowhere for many of these guys to go and in a downturn, the number of these people will only grow. In the absence of a downturn, the demand is still steady. If one is set up to manage this, which seems to be the case with you, there's money to be made. The housing can be bought cheaply and the folks need it.

'Other than safety' -that's a lot. You make 'em safe. You don't guild a turd (learned that expression today from a successful landlord I know.) those tenant are probably happy with that. Safe, functional, and not so fancy that the landlord will come unglued if a hot kettle hits the countertop.

Collecting the money is one part of the equation. You have a remedy there - eviction.

After reading all the above , all I can say is I'm glad I'm almost out of this business. The money is not worth the hassle . It really boils down to this :