How much is a bad tenant going to really cost you?
As property managers in both Vancouver and Edmonton, believe it or not, we sometimes make mistakes!
Ideally, all our choices that we vet and place into our rental properties would be ideal. They would never make any noise, keep our rental property nice and clean, and always, always pay the rent on time! Unfortunately, this is not always reality!
And while we do extensive background checks on our tenants prior to approving them, sometimes we make mistakes. More often than not, the situation that the tenant is in changes at some point during the tenancy, and that’s when things can go sideways in a hurry! Maybe they lose their job and can no longer pay the rent, or maybe they shack up with a new boyfriend or girlfriend, and then end up being pulled in a negative direction.
Whatever the case may be, sometimes good tenants can go bad, despite our best efforts. And when they do, the costs can be staggering!
The cost breakdown of a bad tenant
Of course there are the obvious costs. Lost rent due to a tenant falling into arrears. Increased maintenance or capital expenses due to the tenant leaving your place in shambles. Or vacancy loss if you have to sit vacant for a month or two while you renovate or have to seek out new tenants. Extra legal bills if you need to take the tenant to court in order to evict them.
Then there are the less obvious ones. What happens if the tenant calls the health authority, and they find something wrong with your rental unit? The issue may be a relatively minor one, and it may have been caused by your tenant, but it’s money and time out of YOUR pocket to fix!
What if they call the City bylaw team, and again, they find something wrong with your suite. Maybe it’s an unauthorized suite, and now you’re forced to shut it down. This could potentially cost you thousands if you lose that revenue stream!
Remember that our residential tenancy laws generally favour the tenant, so make sure that you do as much due diligence as possible up front, and next time you’re sitting vacant and desperate to fill a vacancy so you don’t have to show the unit anymore, just always keep in mind the true costs of bringing in a bad tenant!
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