Commercial real estate investors are rushing to grab up distressed Massachusetts multifamily properties for leasing, but many new landlords can find all sorts of bizarre tenant activities complicate property management.
Unless those buying multifamily apartment buildings in Massachusetts are veteran landlords or employ professional full service property management companies to protect them there are all types of crazy scenarios that may be run into.
Some of these don’t just have the potential to cause vacancies or sap returns and cash flow, but can land DIY multifamily property landlords in some pretty hot water…
1. Obligation to Provide Full Service to Illegal Occupants
Most real estate investors are very aware that they cannot physically threaten renters to get them to move out or let the dogs loose on them. However, in Massachusetts rental property owners are also obligated to continue to maintain appropriate living conditions, complete with utilities even if occupants have over stayed their lease, or stopped paying their rent.
Failure to do so can mean expensive court battles and big financial penalties. Thankfully an experienced and diplomatic property management firm has a lot of tools in their arsenal to navigate these situations and cure them.
2. Dealing with Sham Leasing Applications & Illegal Occupants
In addition to the types of illegal occupants listed above and regular tenant application screenings landlords must realize that some shady renters are now stealing IDs or using friends and family members with good credit and backgrounds to secure rental units, before moving in themselves.
Obviously many of these individuals have horrific credit, past evictions and have been nightmare tenants for countless other investment property owners. These are the type that will conjure up endless malicious and frivolous lawsuits. You don’t want them in your properties, and it can take an expert to get them out.
3. Failure to Pay Utilities
Some otherwise good tenants and Section 8 tenants that have their rent paid by the government rack up big utility bills and liens on properties accumulating big costs for landlords. Sadly many times these items go unmonitored until it is too late causing depressed cash flow and returns. It can certainly pay to have someone else on top of these potential issues full time.
4. When Couples Split
When tenant couples split up it becomes a dangerous tight rope walk for investors. There can be police involved, new laws requiring protection of different parties, and often the secondary occupant not on the original lease and who doesn’t have a job can be the one left behind in the unit. These situations need a delicate human approach which protects property owners from liability, makes the best of the situation and ensures continued profitability.
5. Breaking Leases
Renters often want to break leases and move out early for a variety of reasons. These can either turn into costly legal battles while units fail to produce cash flow, or with the help of a professional Massachusetts property management company can be turned around to making units and properties even more profitable.