Alternative to Eviction: Rent Increases?

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If you can’t get rid of them, raise their rent . . .

Sometimes we end up in a situation where tenants aren’t the wonderful people we hope that they are. They throw out of control parties, damage the property, litter the property, have 10 people stay in the 2 br apartment, pay rent late, and so on. You get the point – undesirable.

Many landlords don’t want to have to go through the eviction process. Often times, evictions can be costly and time consuming.

If you’re close to the end of a lease (and you’re not in a rent controled area), why not just raise the rent? I’m not talking about raising rent 2 or 3 percent, but 10% – 15%. There aren’t many tenants who will put up with that kind of increase, and if they do, then it might be worth reconsidering keeping them around. Remember, the odds are they would be paying much more then typical market rents at that point.

Set the Ground Rules Up Front

To avoid all of this in the first place, you need to establish your guidelines up front. You cannot put up with bad behavior, or your tenants will walk all over you. Write a set of guidelines that they must follow with a schedule of fines and have them sign it with the lease. If they pay late, fine them and send out your written warnings preceding eviction process. If they damage the property, fine them. The key is to let them know you are in charge.

I can’t tell you all of the headaches I put up with at first because I was too nice. When I started to lay down the law, and got rid of the undesirables, landlording started to become a much easier process.

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About Author

Joshua Dorkin (@jrdorkin, Google+) is the founder and CEO of BiggerPockets.

5 Comments

  1. Great plan, as long as the problem is not that the tenant has just stopped paying their rent, or pays it weeks late. I inherited a horrible tenant when I bought my first property who continually paid his rent late. If I had doubled his rent, he probably would have stopped paying altogether and forced me to evict him. I told him to leave multiple times, but he would always come up with the cash at the last second, and in my naivety, I would let him stay. I eventually evicted him over a year later, but I collected 10-15% in late fees from him just about every month. Looking back, it still wasn’t worth the hassle.

  2. Great points about setting the ground rules. My late father used to tell new applicants that they’d love him if they paid the rent on time and followed the rules but he’d guarantee them that he’d be their worst nightmare if they didn’t. Letting them know up front that you’re no pushover probably weeds out a number of the derelicts right away.

  3. I’ve inherited my fair share of BAD tenants. At the first opportunity I evicted them and got good tenants in there. Not only does doing that set an example for the rest of your tenants, but it also gets rid of the headaches!

  4. Madison Albright on

    I agree with Josh, Bad tenants must be evicted immediately. This is necessary to let others know. Nobody likes bad tenant headaches!

  5. Additionally, you should consider instituting a no tolerance policy. The day the rent is late, an eviction notice is served. The day the 3 day eviction notice (or whatever your state requires) expires, you have your attorney (or you, if you want to go at it pro se) file the eviction complaint. Explain it up front and follow through. After they call your bluff the first time (and, yes, they will) and they know you are serious, they’ll pay on time if they can. If not, you haven’t wasted any time getting them out.

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