You can’t put a price on peace of mind when it comes to investment properties. You’ve already gone through the hassle and stress of buying the property and making it fit for renters. It’s easy to think that so long as you have a tenant and you maintain the property, everything should be okay.

Unfortunately, not all tenants are interested in finding a nice home to settle down in and look after. Some tenants are looking for somewhere to misbehave. One of the worst ways that someone can use your property is as a drug lab. Worse than just having an undesirable element in your property, drug labs can increase the risk of property damage and incidental damage like fires. Not only that, but these people aren’t looking to hang around, so after wrecking your property and possibly making it a place of interest to the police, they may well skip out on the rent and bills, leaving you holding the bag.

While there are no fool-proof ways of keeping bad tenants out of your property, fortunately there are some red flags to let you know that you might not have the right people in your property.

Why should we be worried about drug labs in rental properties?

Let’s be practical for a moment. Regardless of how you feel about drugs, their growing or manufacturing requires specialty equipment and set-ups. Most of this is not typical equipment that you’d see in a residential property. This isn’t Breaking Bad where we see a state-of-the-art custom facility being built for this purpose: this is where the house you’ve arranged for a family is being altered for something else. Dodgy tenants won’t think twice about putting holes in walls or in your ceiling to create whatever space they need. They will also do whatever they need to do to try and cover their tracks, so they might be burning dangerous materials and rubbish in your backyard, stinking the place out, ruining your soil and annoying your neighbours. Also, the fumes from the drug manufacturing process itself can be dangerous and may ruin your carpets and soft furnishings, never mind the increased fire risk from excess chemicals and/or heat in the house.

Even worse, illegal activity on your premises may render your insurance null and void. What’s worse than having a damaged property is having no recourse for crummy tenants, so it makes sense to avoid them where possible

So, rest assured that you aren’t a bad person for not wanting drugs grown or created (or even sold) from your rental property. With that in mind, what are the warning signs?

Things to look out for

You have two opportunities to spot potential problems in your property: when you first assess prospective tenants, and when you perform your regular rental inspection.

Prospective tenants

This is the best time to weed out candidates that seem suspect or like they have ulterior motives. While this is a boom market for rentals and it feels unlikely that a dodgy tenant would rise to the top of the pack, it pays to know what the warning signs are.

If you’re screening applicants personally, be wary of people who ignore the typical living spaces, such as the kitchen and main living room. If they currently live far away from the property but don’t seem interested in knowing more about the local area, this can be another red flag. Most people want to know how well positioned the house is to the things they need. Chat to them and try and get a feel for how genuine their interest seems. If they’re local, it makes sense that they already know what’s nearby, but if not, it might be a concern.

Another red flag is people offering to pay rent months in advance, especially if it’s in cash. Sometimes people are just looking to minimise contact with the real estate office because they won’t be actual ‘tenants’.

Of course, many of these behaviours overlap with tenants trying to be competitive in the current rental market, so you have to go deeper. This is why doing background checks (if possible) is a good idea, and why properly checking personal and professional references is crucial. If things don’t look like they’re adding up, it’s best to move on to the next applicant.

Existing tenants

The harder of the two situations: what do you do if you think your current tenant is growing, making or selling drugs?

First of all, how can you tell? This is easier than you might think. You know what a house should look like. You know where things go and how things are usually located in a property. When you do your regular inspections, pay attention to unusual smells, especially if they seem to be chemical rather than something expected, like damp. Empty light sockets (i.e.  with the bulbs removed) and removed or disconnected smoke detectors are another tell, as they can be fire risks during drug manufacturing. Also be wary of things that can cover up walls, like flags or wall hangings. These can cover serious damage to your walls and other surfaces.

Ultimately there’s no single factor that will let you know that your tenants are engaged in something illegal, but a combination of unusual observations can make a very compelling case that something strange, if not illegal, is afoot. And, if you do strongly suspect that your tenants may be engaged in illegal activity, don’t confront them. The best way to resolve it is to go to the police and let them know why you think this is the case.

Most landlords want what’s best for their tenants, as well as their property. In a rental market where properties are so scarce, it doesn’t make sense to have yours taken up by people engaged in dangerous, illegal activity. Ultimately, all you can do is be sure to conduct regular rental inspections and keep your eyes on tenants you suspect might be engaging in illegal activity.