What To Do When A Tenant Is Late On Rent.
For an investment property owner there are very few things more intimidating than evictions. In short, evictions are like cancer: there are certain healthy things we can try to do to avoid it, but each year over 12.5 million people will be diagnosed. Similarly, being a good owner, or hiring a qualified property manager, can help decrease the likelihood of evictions, but sometimes they just happen. It’d be wonderful if we could erase both of these ailments from the world but a more realistic approach is to think about how best to limit the damage.
Respond Quickly And Treat All Late Tenants The Same.
Just like when dealing with a life-threatening illness, the best way to avoid a painful eviction is to act fast. This is the biggest mistake that property owners make, and it’s understandable to a degree, because of how intimidating evictions can be. But to return to our metaphor, if someone were diagnosed with lung cancer and told the doctor they’d prefer to wait a month before committing to treatment to see if it got better on its own, we’d call them crazy. If a tenant has shown that they are problematic or cannot reliably pay their rent, there is only risk and lost revenue in crossing your fingers and hoping for change. The key to limiting damages during an eviction is to begin the process of removing the problematic tenant as soon as legally possible.
Get To Court For The Resolution.
By going down this road you are forcing the tenant to act with the power of the law and courts behind you. More often than not, payment plan agreements can be made and signed off upon without having to appear before a judge, but without going through this process, you as the owner are only increasing the likelihood that you will have a non-profitable unit due to your acceptance of excuses, empty promises, and/or your good natured trust of someone who has already shown an inability to follow the requirements of their lease.
Protect Your Income Loss With Enforceable Agreements.
Evictions are not pleasant, but they don’t have to be as painful as inexperienced owners expect. By beginning the eviction process as soon as possible you ultimately decrease the amount of time your rented unit will be a risk. Remember, an eviction usually doesn't result in immediate removal of the tenant, but rather some legally binding payment plan or agreement that is much more reassuring than the excuses he or she might give you over the phone. And if it should come to it, inability to follow that legal agreement would then be followed by removal and an opportunity for you to quickly turnover and rent that unit to return it to a state of profitability, which is ultimately your goal as a property owner.
Mick Lefort is the Vice President of Operations for Nexus Property Management®. A National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.
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