Navigating Bad Tenants in Riverside, CA:
Introduction:
Riverside is a city where the real estate market is incredibly dynamic and brims with promise. For homeowners considering buying a property, the allure of profit is often shadowed by the concern of troublesome tenants jeopardizing their property and investment stability.
In this blog, tailored for Riverside homeowners, we navigate the intricacies of managing difficult tenants and maximizing property returns. As a property manager and real estate investment expert, I am committed to unraveling strategies that help mitigate risk and ensure an optimal return on investment for your rental property.
The Current Riverside Rental Market:
Riverside is a city filled with diverse neighborhoods and vibrant lifestyles, allowing for a dynamic landscape for rental properties. Since December, the demand for rentals in Riverside has increased significantly. This is partly due to the growing rental market but primarily because people are done with their vacations and are looking for houses. Usually, the rental market takes a significant hit in the winter months but significantly grows during summer. Riverside also comes with many families, young professionals, and students attending nearby universities, all contributing to the thriving rental market. This heightened demand allows for a stable rental market (in terms of pricing) and opens up opportunities for property owners to capitalize on the flourishing market.
When purchasing a property, navigating the nuances of each neighborhood is crucial. Understanding what makes areas like the historic Mission Inn attractive to a tenant is vital for adequate income on your property. Rental property income is determined by location, the most critical factor when deciding what property you want.
Alleviating the Risk of a Bad Tenant:
Bad tenants are a nightmare for self-managing landlords, especially if they are less experienced. When contemplating renting their home, homeowners must be aware of the pitfalls a bad tenant might cause to ensure a smooth and profitable landlord-tenant relationship.
One of the most prevalent concerns is the potential for property damage. Riverside is one of the largest cities in Southern California, which means there will always be some bad apples when choosing tenants. However, PMI Riverside has developed a tenant screening process that allows us to remove those bad apples from the selection process. That said, a tenant will not always be a good one, and you can never honestly guarantee they won't damage your property. What you can do, though, is try to mitigate the damage done through many different avenues.
For example, one key mitigating factor would be a thorough inspection of the property before and after a tenancy. PMI Riverside recommends that the move-in inspection be completed and done with the tenants themselves to alleviate any risk down the road when it comes time to have them move out. Inspections are for the safety of both owner and tenant and are a way for the landlord to decide how much security deposit will be needed for repairs and maintenance.
When it comes to the actual payment of rent, timely rent payment is the most significant factor that comes to mind when choosing a tenant. What PMI Riverside does during the tenant selection process is look at a tenant's credit history; that way, we know whether or not they have a history of late payments. We also contact previous landlords/management companies (if applicable) and ask them to send over a ledger of that tenant's payment history to see if they pay late or not, honestly. However, if you are choosing to manage your property, you may not have access to this information, which means you will be at a disadvantage when it comes to selecting a tenant; the only thing you can do is set a minimum credit score (we recommend a 600 credit score or better) and hope for the best.
Navigating a Difficult Tenant:
On a different note, let's say you already have a bad tenant in your property. They are always late on rent, or it's challenging for you to communicate with them. Well, there isn't much you can do in this situation; you do, however, have a couple of options. If you want to, and the tenant isn't paying rent, you can send them a 3-day notice to pay or quit. I won't go into too much detail about the eviction process for this blog post, but I have hyperlinked my previous blog post that can guide you through that process. One thing that may be in your favor is if you are coming up on the expiration date of your lease agreement (if it's a one-year lease); if that's the case, you, as a landlord, can choose not to renew your lease, and give the tenant a 60-day notice to vacate the property. If you are on a month-to-month lease, you can give the tenant a 60-day notice at any time applicable, which may be better for you in this current situation. PMI Riverside generally recommends having a one-year lease, but that will be for another blog post sometime in the future.
The Role of Professional Property Management in Riverside:
A lot of what we have covered today can be mitigated in advance through professional property management. This sounds a little gimmicky, but life is a lot easier when you have someone who has probably already dealt with your current situation multiple times or learned to stop it from happening in advance. For example, PMI Riverside has been in business for 12 years, and we have seen our fair share of bad tenants and learned how to stop it from happening as much as possible. Landlords who choose to manage their property are always at a disadvantage when comparing them to a professional property management service.
One of the key advantages of professional property management is tenant screening, which we reviewed previously. Property managers employ strict screening processes to identify reliable tenants, mitigating the risk of potential issues during tenancy.
The legal intricacies of Riverside are also a complex topic for landlords who may not be experienced or licensed real estate professionals, which is another reason why professional property management might be a good idea. Property management companies can bring a wealth of knowledge and ensure landlords comply with local regulations. From solid lease agreements to handling eviction procedures (hopefully not), their expertise provides a crucial safeguard for homeowners.
Maintenance is another massive cornerstone where property managers excel. Imagine a world where you don't get bothered by tenants on the weekends saying that someone broke their mailbox or that their kitchen faucet doesn't work anymore. That is where property management is effective; you give yourself more time to do other things. That efficiency is also why people say that property management makes you more profit from your rental home (it does if you use it to your advantage). At PMI Riverside, we always attempt to fix the maintenance issue over the phone before contacting the owner and telling them we must put in a maintenance work order. Also, ensuring the property remains in optimal living condition for your tenants fosters positive relationships and contributes to your investment's long-term appreciation.
If you want to maximize your profits from your rental home or see if a property management company would be a good fit for you (it almost always is), please feel free to contact us here.
Conclusion:
Dealing with difficult tenants while trying to maximize revenue is one of the most difficult challenges in property management; however, as you have seen, there are many different ways to mitigate the damage.
For those seeking to venture into the rental realm of Riverside, the insights shared in this blog aim to empower you to make good decisions. Proactively addressing tenant challenges, finding your rental value, and being strategic is the key to maximizing your revenue.
