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Mike Moon got quite the shock when he found out what his tenants were really doing in his rental property.

In late April, more than 300 law enforcement officers from around 10 federal agencies zeroed in on Moon’s property in the early hours of the morning.

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During the raid, officers seized cocaine, pink cocaine and meth. They detained over 100 people and arrested two on existing warrants.

Jonathan Pullen, a Drug Enforcement Administration (DEA) special agent in charge, told reporters at Denver7 that many of those detained will face federal immigration charges.

What was the landlord’s reaction?

“They were supposed to be out of here by the end of this month,” Moon told reporters. He said he felt dumbfounded after learning what his former tenants were doing on the property.

Moon said that the lease contract specified that the space was for events like weddings, quinceañeras and birthdays. The lease had strict terms, and tenants weren’t allowed to serve alcohol on the property — a rule that was blatantly ignored.

What rights do landlords have when tenants misuse the property?

According to state statutes, tenants must adhere to any lease agreements set by the landlord, provided they don’t break any fair housing laws.

For example, if a tenant “commits a material violation of the rental agreement,” the landlord has the right to evict them. In Moon’s case, the tenants used the property for illegal purposes and didn’t adhere to the property’s intended use.

There are also cases where landlords can exercise the “no fault” law — as opposed to “for cause” — where they can evict a tenant by not renewing the lease. In Moon’s case, he told the tenants he’s taking back the property to convert it for another use.

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How can landlords protect themselves?

The best way to protect yourself as a landlord is to be proactive — in other words, by being scrupulous before taking on a new tenant.

When listing your property for rent, review tenant applications carefully and ask for information such as their business license and registration, especially if renting the property for commercial purposes. Interview the applicants in person, request references and background checks. Unfortunately, even with these checks in place, you can still run into bad actors, not to mention the burst pipes and midnight maintenance calls that come with being a landlord.

But there are other ways to potentially profit off property without the headaches and responsibilities of being a landlord.

Platforms like Homeshares provide accredited investors  — or those with $25,000 to invest — with direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund.

This fund can provide an effective, hands-off way to invest in high-quality residential properties.

With risk-adjusted target returns ranging from 14% to 17%, the U.S. Home Equity Fund could unlock lucrative real estate opportunities without needing to become a landlord, offering a low-maintenance alternative to traditional property ownership.

If residential real estate doesn’t sound like a good fit, there are also commercial real estate investment opportunities available.

First National Realty Partners, or FNRP, can allow accredited individual investors access to institutional-quality commercial real estate investments — and without the leg work of finding deals themselves.

FNRP’s team works with some of the nation’s largest grocery-anchored brands, including Kroger, Walmart and Whole Foods, while providing insights into the best properties both on and off-market. And since these brands sell necessities, the investments tend to perform well even during economic volatility, acting as something of a hedge against inflation.

You can speak with experts, explore available deals and easily make an allocation, all through FNRP’s personalized portal.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.