First Tenant Nightmare...suggestions appreciated
My wife and I purchased our first rental in August of last year, and suffice it to say this has been quite the learning experience with many newbie investor mistakes made along the way. Right now we are dealing with our first tenant, and we sure chose a winner. We are trying to decide whether to try a cash-for-keys approach or go through the much-dreaded eviction process to get rid of her. There are some wrinkles, so any ideas from more experienced investors will help.
The bottom line is that we need to be rid of this tenant because we don't think she can continue to pay (even late). One-third of the income she reported was alimony, which I have found out she is no longer receiving, putting her well below our income requirements. On top of that she has not yet made a single payment on time. Saturday was the first payment she has made with her own money since renting to her in December, having relied on the government and charities so far. This time it took a "5-day pay or quit notice" to get her to pay the $759.11 that the government wasn't willing to cover. Even so, after multiple notices, she still only paid $750, leaving us $9.11 short.
Since she is almost paid up until the end of February, I have considered a cash-for-keys offer giving her time to get out by the end of the month (obviously no cash until she's gone). However, negotiating such an offer or even a meeting will be difficult because she won't take my calls (says her phone is broken), and I would prefer not to put such an offer in writing. Conversely, I have considered continuing with the eviction since she is still $9.11 in arrears; however, I am worried that a judge would balk at an eviction for that amount, especially when she is a single mom with kids (though, I'm sure she will be late on March rent by the time we meet in court). That said, I can't simply let her get away with intentionally testing the limits at every turn and paying anything other than the FULL rent due, especially when we have been very generous in working with her to this point, and I know we'll have to do an eviction later in the year if we don't resolve the problem now.
Any suggestions? Would a judge balk at an eviction for such a small amount, especially when the amount in arrears is from utilities/late fees (we are in VA, which is supposedly landlord-friendly)?
How would you approach cash-for-keys, particularly when the tenant isn't responsive to communications?
Thanks for sharing your experience and advice.