Renting out property can be a lucrative investment, but without the right precautions, it can quickly turn into a nightmare. From damaged homes to unpaid rent, both landlords and tenants have their fair share of horror stories. With careful planning and communication, many of these issues can be avoided, leading to a smoother rental experience for everyone involved.
Common Rental Issues and How to Prevent Them
1. Neglecting Property Maintenance
One of the most common issues landlords face is property maintenance. Regular upkeep is essential to prevent small problems from becoming costly disasters. Tenants should report issues as soon as they arise, and landlords should respond promptly.
"I had tenants that used the single car garage as a dump. [It] was completely filled with trash because they didn’t want to pay the trash bill... maggots, garbage, mice... Think about [a whole] room, packed with garbage bags. And the house wasn’t much better." — Andy
Tip: Include garbage removal in the lease agreement to avoid mismanagement. Regular inspections can also help catch issues early. For landlords new to managing properties, sites like BiggerPockets provide excellent resources on maintenance best practices.
Additional Resource: Consider using platforms like Angi to connect with reliable maintenance professionals in your area.
Related Reading: Our Guide to Investment Real Estate
2. Tenant Screening Is Key
Finding the right tenant is critical to avoiding future headaches. Comprehensive tenant screening should include background checks, credit reports, and references from previous landlords. Services such as TransUnion SmartMove can help streamline this process.
"I’ve had tenants who stopped paying rent after the first month. They avoided communication, and by the time the eviction was processed, the damage to the property was extensive."
Tip: Partner with a local bank, such as Security Bank & Trust Co., to explore financial options like business loans that can help cover unexpected costs during tenant transitions. You can also explore tools like TurboTenant to simplify tenant screenings and lease agreements.
Additional Resource: Read up on effective tenant screening strategies at RentPrep.
3. Unclear Lease Agreements
Miscommunication often stems from unclear lease agreements. A detailed lease should outline the responsibilities of both parties, including maintenance, rent payments, and policies on property modifications.
"I got the call every landlord dreads at 10 P.M. … the toilet is plugged and it’s over flowing. Not being very handy, I head out the door with a plunger and extremely small toilet snake. Walking into the bathroom of the house, I immediately realized I was woefully underprepared. Cue emergency call to the plumber. After what seemed to be an entire roll of toilet paper was pulled out, we found a large, blue dog treat KONG was the culprit. Moral of the story, dog toys and toilets are a bad combination, and plumbers who make after hours calls are worth their weight in gold." — Amy
Tip: Clearly define emergency procedures in the lease and encourage tenants to use professionals for significant repairs. Consider referencing templates from the American Apartment Owners Association or Minnesota Multi Family Housing Association for crafting comprehensive leases.
Additional Resource: Learn how to craft landlord-friendly leases at Nolo.
Related Reading: Why You Should Be Using a Digital Rental App
Real-Life Lessons for Landlords
Rental property ownership can teach valuable lessons about planning and resilience. Here are some strategies that landlords and tenants can use to avoid common pitfalls:
1. Communicate Effectively
Open communication helps prevent misunderstandings. Tenants should feel comfortable discussing maintenance issues, and landlords should be proactive in addressing them. Tools like Buildium can streamline communication and property management.
Additional Resource: Check out Apartments.com Rental manager for tools to improve communication and simplify management.
2. Budget for the Unexpected
Whether it’s a burst pipe or an unexpected vacancy, having financial reserves is essential. Minnesota banks, like Security Bank & Trust Co., offer small business loans and real estate lending solutions to help landlords manage these situations. For budgeting guidance, resources like You Need a Budget (YNAB) are invaluable.
"I heard from one of the tenants that there was water in the basement. I suspected it was a clog in the main sewer drain line [and] once I saw a photo I knew for sure as the water contained fragments of toilet paper and ‘other stuff.’ Fortunately for me the basement was unfinished and the tenants didn’t have any items near the floor drain. I immediately contacted all of the tenants in the building and begged them to limit their water use if possible because anything that went down the drain would end up in the basement. I also contacted a drain cleaning company to come out but realized they would not work in a pool of waste… So, the fun began… I used a sewage ejection pump and a hose to pump the water, [and] after putting on old clothes, rubber boots, gloves and a respirator, I used a shovel and 5 gallon buckets to remove the SOLIDS." — Brian
As a landlord, drain issues are not uncommon. They are the result of a combination of tree roots growing into the sewer lines via gaps in the pipe connections, and/or people putting things down the drain (personal hygiene products, dog toys, etc.). Brian's advice to staying out of knee-deep waste pools is:
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Have a camera inspection on the sewer line before or just after purchasing a new property (before is preferred as sewer line repairs can be in the tens of thousands of dollars).
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Have tenants read and sign something indicating they will only put toilet paper down the drain or at least discuss it with them when signing the lease. Every drain company will tell you that even the wipes marketed for bathroom use and are supposedly "drain safe" cause issues and shouldn’t be used.
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Have the main sewer line cleaned periodically. This could be annually or every few years depending on the conditions. It is good to get a good “drain person” on your vendor list as smaller clogs are common in sinks, toilets, and showers.
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Make sure your property insurance covers sewer back-ups. This is particularly important if the basement area is a finished space.
3. Stay Informed on Local Laws
Understanding Minnesota rental laws can help both landlords and tenants navigate disputes. For example, landlords must provide a habitable living environment, while tenants must adhere to lease terms. The Minnesota Attorney General’s Office offers detailed resources on tenant and landlord rights.
"[I] rented a typical college house while attending university. Just after going to bed on a random week night, the front door opened and a group of people walked into the living room. Being loud and obnoxious made it easy to hear the chaos. [I] walked out the bedroom to see what was going on, and found a group of intoxicated guys that said, 'We lived here a couple years ago and just wanted to see what the old place looked like, and we still had the keys!' Ended up being harmless, but sure wish the landlord had thought to change the locks." — Clay
While landlords require tenants to return the rental keys, there is no way of knowing whether those previous tenants made copies to hand out to friends, family, and partners, or are willing to pay the fee of a "lost key" just to keep the memento. Something to keep in mind as a prospective tenant then would be asking potential landlords whether lock changes are included in the lease agreement.
There are a lot of rights and responsibilities that both parties should know when it comes to taking on a rental property. Check out the Minnesota Attorney General's Landlord and Tenant Handbook — which according to Minnesota Statutes § 504B.181, subd. 2(b), landlords are required to notify residential tenants this handbook is available to them.
Why Partnering with a Local Bank Matters
Managing rental properties often involves significant financial responsibilities. A trusted Minnesota bank like Security Bank & Trust Co. can provide tailored financial solutions, including real estate loans, property investment financing, and business banking services.
By aligning with a community-focused institution that excels in lending to real estate investors, landlords can access resources to manage and grow their property investments. Tenants, too, can benefit from banking services that make rent payments and financial planning easier. Banks with a deep understanding of the local market, such as Security Bank & Trust Co., can provide guidance that’s directly relevant to Minnesota property owners.
Expanding Your Property Management Toolbox
To succeed in managing rental properties, leveraging the right tools and resources is essential. Here are some additional recommendations:
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Maintenance Scheduling Tools: Apps like Upkeep help schedule and track repairs to prevent long-term damage.
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Payment Platforms: Services like PayRent make collecting rent secure and straightforward.
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Educational Content: Follow blogs like Apartments.com Resource Center for practical advice on managing properties.
Final Thoughts
Rental property ownership comes with its challenges, but proactive measures can prevent many of the common issues landlords and tenants face. Whether it’s ensuring clear communication, maintaining the property, or partnering with a reliable Minnesota bank, these steps can help create a positive rental experience.
If you’re a landlord or tenant in Minnesota looking for financial solutions, contact Security Bank & Trust Co. today to explore our real estate lending and small business loan options. Let us help you turn your rental challenges into success stories.
