Are you aware of the expenses associated with allowing a smoking in a rental property? If not, you need to understand that a smoker will cost you at least 10% of your profits due to increased turnover costs and additional vacancy. That is an unscientific number, and I may venture to guess it may be much higher.
Smoking in a rental property will cost you plenty in term of lost profitability.
First, a disclaimer: I am a rabid anti-smoker, and I have never been a smoker. I do not allow smoking in my rentals. If you want to smoke, go live somewhere else. If you think it is your right to smoke in your own home, I agree — but not in my rental unit. Ever. I do allow smoking on the outside, but only after the tenant passes my rigorous background checks. They are not allowed to smoke in any covered area, not even the garage.
To be fair, if I thought it was more profitable to allow smokers, I would actually encourage it. If it was more profitable for me to allow a renter to be a crackhead and to kill baby seals in the bathtub, I would probably allow that, too. But it is not, so I do not allow it.
I want to maximize my profitability and minimize the work it takes to be profitable. Less work and more money in real estate is always a good thing.
The “Old” Days of Smoking
As a kid growing up in a smoking household, I can remember my mother leaving cigarettes burning in the bathroom and her lighting up another in the kitchen. We also lived in a rental. (Note to other landlords: Avoid renters with kids like myself.)
There was always a cigarette burning in our house. No one ever thought about the fire dangers of cigarettes, and smoke detectors were not even invented yet.
When I flew on airplanes, anyone could light up, anywhere in the plane. Any restaurant, anywhere in the place was a fair place to light up. My mother, a nurse, was upset when the hospital banned nurses from smoking in the patient’s rooms. Imagine a nurse firing up a heater just before drawing your blood. Of course, they could still light up at the main nurses station, but that was a violation of her “rights.”
If you would have tried a non-smoking rental in those days, you would be vacant a long time. Many people smoked, and many people had friends who smoked. The smoking friends expected to visit someone and light up inside the house. Smoke lingers well after the last cigarette is put out. I have been in houses a week after anyone had smoked in them and have come out smelling like I just got out of a bar.
Now, the tide has turned. The dangers of secondhand smoking are well known. The fire dangers of unattended cigarettes are real. The extra work and expense of turning a smoking apartment into a place to rentable to a non-smoker is real. You want to go with the trend and have a non-smoking rental to both save money and to have a faster rental turn.
Disadvantages of Smokers in Your Rental
When you are showing a non-smoker an apartment where a smoker lives, you can bet it will be a waste of time. Most quality renters do not smoke. They do not want to live in a place that smells like it has been smoked in. They do not want the smoke to be on their clothes or to continually smell the stale cigarette smoke the air. That is why hotels and car rental agencies have non-smoking rooms and cars.
You will perform many showings to quality renters, only to lose them as soon as they walk in the door. If not for the smoke smell, you could have possibly gotten the apartment rented much earlier. After a few lost prospects, you may decide to settle for a lesser quality renter and suffer the implications of a low-quality renter.
When you have a vacant unit, it will need a full paint job to get the smoke smell out of the air, including the ceilings. You will also need the carpets shampooed. Even if your smoker tenant was a great housekeeper, there is nothing short of a full paint job and carpet shampoo that will get rid of the smells. Even then, it may be difficult. Cabinets and ductwork will also have to be cleaned. Compare this to a minor touch up for a non-smoking apartment.
If you have carpet and are renting to a smoker, you will inevitably get cigarette burns on your carpet. Ashes drop, and rugs melt. You can try to trim the carpet fibers to reduce the visual impact, but it is still more time spent and more damage caused, by a smoker.
In a multifamily unit, smoke will permeate the walls and affect your other tenants. If any of your other renters are non-smokers, they will soon complain and move out. Smoke will get in the common area, either by leaching under the doors, or as smokers take that last puff as they enter the building. The ground will be littered with cigarette butts, as you will suffer from smokers that “pick them up later.”
If you have a renter with a medical marijuana card, you can still require them to go outside to light up. Nothing in the Americans with Disabilities Act (ADA), Fair Housing, or any other act requires you to allow smoking in your rentals. It is only your own inability to create and enforce non-smoking rules that will be your largest hindrance.
And if you have a tenant who is late on their rent, yet has enough money to buy cigarettes, that tells you they care more about their own hedonistic habits than they do about your family and financial well-being. Nothing irks me more than someone with enough money to buy cigarettes (or hair color, a manicure, a big screen TV, a new car, a rock concert, traveling vacation, etc.), but not enough money to pay rent.
Benefits of Smokers and Smoking
Before all of the smokers start to get annoyed by the above statements, I know there are many advantages to smoking. So I will give you some credit here.
- Smokers are part of the solution to saving Social Security. They do not live as long, so they never collect their ‘allocation’.
- Smokers pay a lot in taxes. In MN, a pack of cigarettes is almost $7, and in other states they are much higher; mostly due to huge taxes on cigarettes.
- Smoker use less healthcare. When smokers are younger, they may use a bit more healthcare, but in the end they go quick. They do not linger on for years, causing huge healthcare expenses.
- If a woman is pregnant, heavy smoking will allow for an easier childbirth, as the baby will be smaller.
- Apartments get rebuilt due to smokers causing fires. This creates jobs and newer places for people to live. Careless smoking is the leading cause of residential fire deaths.
- In MN, every time you have an additional heat source when it is 20 below zero, even if it is only a single cigarette, it has to help?
Smokers are becoming the pariah of society. In just a generation or two, we have come from a point where a nurse could smoke in a hospital room while checking on patients, to a society where you cannot even smoke outside in many areas. So, why is it that you do not exclude them for your rentals? Every day you allow it, it is costing you.
What if a smoker really wants to rent?
If you have a rental that you want to allow a smoker, and the smoker is willing to pay, you need to be 100% sure that you will not detract for future renters with the smoking smells. If the smoker is willing to pay for it, it is up to you.
You cannot just add an additional deposit to cover all the expenses, as a Judge will never allow you to charge for the vacancy expense while you repaint. A judge will never allow the vacancy expense while you wait for a great tenant, because you could not show the apartment due to the stench of the smoking. Remember, great tenants look six to eight weeks out, so if you have to wait for the unit to be repainted and cleaned to show it, you have lost up to two month’s rent. All for a one year lease.
There is also extra work. Assuming you show the unit as soon as you know a vacancy is coming available, you will probably show the unit to quite a few more tenants than normal. This costs time and money. The smoker should also pay for that.
The extra cleaning the nicotine stains from the cabinets, walls and trim, ceilings, air conditioner and heating vents, etc. all cost money too.
I have heard the ozone machines take away the smell, maybe they do, maybe they do not, but the coating of nicotine is still there. Is nicotine harmful to breathe, even if you cannot smell it? Is it in the air and you are breathing it when there is a coating in the rental? Will it become a hazard someday, like lead-based paint, and require ‘nicotine mitigation’? These future costs need to be factored in.
What if a smoker causes a fire and your insurance goes up? What if the smoker also took the smoke detector down, as many renters do, and they got killed from a smoking fire? Will you be held liable for the non-working smoke detector?
You need a deposit at least double of what you typically charge, and a rent at least 35% higher to make up for the cost potential of a smoker. To get any less you will be shortchanging yourself.
Making the Transition to Smoke Free
There are plenty of programs available that help you turn your apartments into a non-smoking environment. Start by including non-smoking clauses in your lease.
Tenants who are on a month-to-month lease can be given a 30 day notice. You can set up a date in the future when all smoking is banned in the apartment. If you want to squeeze a bit more profit out of your rental, get rid of the indoor smoking now.
Do you allow smokers in your rental? What extra expenses has it cost you? What do you remember from the “old” days of smoking? Are you a smoker?