Key Takeaways
- Average eviction costs $3,500-$7,000.
- Deferred maintenance is a false economy.
- Budget 10-16% of rent for maintenance + capex.
- Transition to professional management at 8-10 properties.
BRRRR properties require decades of management. Poor management destroys the returns BRRRR creates.
Tenant Quality Pitfalls
Average eviction costs $3,500-$7,000. Rushing placement to avoid $1,500/month vacancy may cost $10,000+ in eviction and damage. Rigorous screening is always more economical.
Deferred Maintenance
A $200 plumbing repair ignored becomes $3,000 water damage. Establish preventive maintenance: HVAC service 2x/year ($150-$300), gutters 2x/year ($150-$250). Budget 5-8% maintenance plus 5-8% capex reserves.
Management Scaling Pitfalls
At 15 properties, issues overlap: simultaneous vacancies, maintenance emergencies, and lease disputes. Plan transition to professional management at 8-10 properties.
Common Pitfalls
Lowering screening standards to fill vacancy quickly
Risk: Higher eviction rates, more damage, and lower long-term returns
Maintain consistent criteria; 2-4 week vacancy costs less than a bad tenant.
Not conducting regular property inspections
Risk: Lease violations and unreported damage go undetected
Conduct semi-annual inspections with proper notice as permitted by state law.
Best Practices Checklist
Sources
- TransUnion — SmartMove Tenant Screening Data(2025-01-15)
- NAA — National Apartment Association Survey(2025-01-15)
Common Mistakes to Avoid
Lowering screening standards to fill vacancy quickly
Consequence: Higher eviction rates, more damage, and lower long-term returns
Correction: Maintain consistent criteria; 2-4 week vacancy costs less than a bad tenant.
Not conducting regular property inspections
Consequence: Lease violations and unreported damage go undetected
Correction: Conduct semi-annual inspections with proper notice as permitted by state law.
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1.What is the biggest financial risk of tenant quality issues?
2.How can BRRRR investors protect against tenant risk?
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