BiggerPockets

Around here the banks offer $500 "Cash for Keys" to foreclosees if they will vacate quickly and leave the premises "broom clean".

How about you landlords out there? Do you give any monetary incentives to avoid formal evictions and rid yourself of non-paying tenants faster? If so, how do you handle it and how much do you pay?

Several months ago I offered a tenant $250 if she would leave by the end of the weekend which she did, and she left the place pretty clean, too. My main savings was on time, since in NC it can take almost a month for the eviction process to unwind. Then again, I also saved $130 in fees.

I'm not doing that with my latest eviction because this tenant knows the game and intends on staying until the sheriff escorts her out. I would not have rented to her in the first place if she had had a previous eviction, so my gift to future landlords is placing one on her record.

Anyway, I'm interested in reading how other landlords handle these situations.

Thanks to all who respond.

Typerider,

I NEVER pay someone to steal from me! NEVER! If someone broke into my house, I would not pay them to steal from me and I won't pay some non-paying deadbeat tenant to steal from me either.

In addition, tenants know each other. Once you pay one deadbeat to leave, why shouldn't any tenant that wants to leave simply stop paying rent? They beat you out of a month's rent and you'll pay them to do it! Also, if you're not enforcing the lease on the rent issue, why should the tenant expect you to enforce any other part of the lease. If you pay tenants to leave, you've already proven to be a weak landlord, and tenants will exploit that!

Finally, once you start paying the deadbeats, you could easily be charged with discrimination when you decide that you're not paying another deadbeat tenant to leave. If the person you don't pay is black; is a woman; is handicapped in any way; etc, then you are treating them differently than others because you are discriminating. I don't discriminate - if a tenant doesn't pay the rent on time, I give them a 3-day notice the next morning. I treat all deadbeats the same - by giving them the (legal) boot!

Mike

I Second MikeOH's post in its entirety.

I will ADD, same applies to subsidized tenants not paying their portion, no matter how small.

Cash for keys is a great idea and usually works. Individuals need to start thinking like business people and leaving their emotions behind. If you can pay someone $500 to vacate and save yourself $1,500 in the long run then it is certainly worth it.

Ridiculous! Once the tenants realize that you are a weak landlord and you pay people to steal from you, any savings you will have from that initial cash for keys will be dwarfed by the losses in the future. Weak landlords don't survive in this business.

I screen them like everyone else does. I also give them a very " firm" talk about how I have a zero-tolerance policy for non-payment of rent.

So, let me get this straight. You give the tenants a very " firm" talk about your zero-tolerance policy for non-payment of rent, but then when they don't pay the rent, you reward them buy paying them to violate your lease and your zero-tolerance policy? What does that do to your credibility with the rest of the tenants? Why should any tenant follow any of your lease terms? If they violate the lease, you'll pay them!

Good Plan!

Mike

Heathen -

In my lease the wording is such that rent not paid by the first constitutes a 'breach' of the lease, and so technically I could file for eviction on the second based on that breach. I have not tested this in court, choosing to go the 'safe' route with the 10-day-pay-or-quit.

But you are correct about consulting an attorney, and if I can find a shorter method any savings in time will be worth it.

Unlike the past, my current leases with low-income tenants, though written, are now all month-to-month because that requires NO reason on my part to stop doing business with troublesome tenants.

But still, if they know the system they know how to play it to the hilt.

Thanks for your input.

I just got rid of tenant two weeks ago using this method. I waited until they were 7 days late and exercised a clause in my lease to have them vacate the property. at first I got a hard time but I mentioned that if they were out within a week and if the house was left in the same condition they received it that I would only deduct the due rent (12 days) from their deposit and refund the rest. It worked like a charm. house was spotless and rented it this weekend. Saved me all the attorney and fees and probably repairs. I will definitely do it again. What low income folk need is money, I don't see it as a tremendous loss to offer them part of their deposit to leave the place in good shape and get out. I lost 1 weeks worth of rent plus a little paint. good to go for another year now.

Christian,

I don't think he's talking about a non-paying tenant. He's saying that a month to month lease allows you to give the tenant notice if you don't like what they're doing (for example using drugs) instead of waiting for the one year lease to expire or trying to evict for something other than non-payment.

I agree with him 100% on this issue. There is absolutely no point in giving a low income tenant a one year lease. You have absolutely no leverage over them (what are you going to do, sue them?). They, on the other hand, have a lot of leverage over you with a year lease (they can sue you and collect).

Mike

I am now more clear on your point, but I still do not 100% follow your logic.

Let me try it this way:

Hypothetically...

If I offer a low-income tenant a yearly lease

And you offer a tenant next door a month to month lease.

Both tenants throw big drug-infested parties and do other unsavory things. Let us say, for sake of conversation, that they DO PAY THEIR RENT, just to take that out of the equation.

What makes you think that your MTM lease will get them out faster than my yearly lease? If they say they are staying, both of us still need to go before the judge to get them out (same judge in my hypo example). I have a great lease that says no drugs and lists out other unacceptable unsavory behavior. At that point, your MTM lease will have expired. Either way we both go through the eviction process and both likely WIN just to get them to vacate our premises.

Christian, I can give 30 day notice and then evict for overstay.

There is no answering the charge. Either the tenant is out or he isn't. If he isn't, the judge orders him out

Your guy, on the other hand, says to the judge he is so sorry. They had out of town relatives. It only happened once. It will never happen again. The drug charges are all lies told by their racist neighbors.. The landlord is tryig to evict them becasue they complauined about faulty plumbing. They have small children who would be harmed by the move.

The judge decides that one party isn't grounds to evict, so he lets them stay and says they don't have to pay any more rent until you fix the plumbing (which has nothing worng with it.)

Ot's more likely that you are going to want to eivct for additional persons moved in than for wild drug parties. The tenant lies and denies it. Then you have to prove it. I don't; I just give 30 day notice.

Or you see too many short visits and decide there is drug dealing. The tenant denies it. You have to prove it. I don't, I just give 30 day notice.

Your tenant moves in a pitbull. Everytime you try to get them out, they move the dog out for 2 days. You take them to court. They swear to the judge the dog was just visiting and doesn't belong to them. You have to prove the dog lives there, I don't; I just give 30 day notice.

Your tenants park on the lawns or piles trash pn the porch. The judge doesn't thank that is reason for the tenant to lose his home. I don't have a problem; I just give 30 day notice.

Your tenant is a complainer and fights with the neighbors, driving your other tenants out. Good luck with that one. I just give 30 day notice.

If I had college rentals, I would do a lease. Students drop out of school and it's hard to find new students in the middle of the year, and no sane adult will rent an apartment in a student complex. It would be very hard to fill that vacancy. Parent co-signers are on the hook. It's not like they are low income and untouchable. You can make the parents pay.

You are right, Christian. We both have the same eviction process. The difference is that I don't have to prove anything, except to present a copy of the 30 day notice I gave them, and then 100% of the time, the judge will grant the eviction.

There is a more subtle difference. Tenants know that judges sometimes won't grant an eviction on the grounds of lease violation if it doesn't involve non-payment. Therefore, they are more willing to stay and fight the eviction and drag it out.

(Touch wood) I've never gotten as far as the eviction court. The month to month tenant knows that 100% of the time, the judge is going to throw them out. So they go at the end of their 30 day notice.

Like you, I file an non-payment eviction as soon as the rent is not paid on time. For non-payment, I don't give a 30 day notice, except that if they force me to give them a pay or quit a second time, they will get their 30 day notice to vacate even if they pay to stop the eviction.

I would have to file eviction for lease vilation only if I couldn't allow the violation to go on for more than 72 hours. But again, because the tenants know beyond a shadow of a doubt that I can get them out, so far they have always complied with notices.

On the plus side for leases, it cuts down on the applicants who already know that they have no intention of staying. A lease won't hold a tenant in place once they decide to move, but usually if they know they only want a place for 2-3 months, they don't want to sign a lease..