10.17.14 Tenant co-signer is on Hospice

When I was writing my 2014 real estate goals, I wrote success measures as having less high cost tenant move outs and having fewer borderline tenants to manage. By those metrics, our year is shaping into an epic failure.

What has happened most recently with our non-paying tenants:

• The boyfriend/tenant left his girlfriend and moved out of state.  I thought sex offenders had to stay in their county.
• The remaining tenant paid $100 from her small Wal-mart paycheck toward late rent, and we accepted it, nullifying the 3 day pay or quit.
• We e-mailed the co-signer to let her know of the issues, the amount due and how it is growing each day, and our plans. No response.
• Our tenant says she has a roommate that wants to move in Nov 1st, but we have not received an application.
• She also says that her boyfriend is going to send money and that her grandma (the co-signer) will give her money to keep the unit. So far no money beyond the $100.
• She is in denial and still thinks she can afford this unit when it is quite clear that she is completely over her head.
• Disagreement on how to proceed. I am begging Bruce to be firm that she needs to move out 10/31 or sooner, he has more compassion because the only place she can go is to a homeless shelter. If nothing happens on either side, her rental agreement expires 10/31, but no guarantee she will actually leave since she has nowhere to go.
• Her measly deposit and the $100 covers rent through the 15th, so she is now living there for free. And that assumes the unit is in great shape at move out.
• The kicker – Bruce phoned the co-signer grandma to discuss the situation and found out that she is in Hospice. We were at her house a month ago and she seemed perfectly healthy.  Sad for the family, but also sad for us as the safety net disintegrates.
• But, no evidence of meth activity whatsoever.

I think it is interesting that readers jumped to the conclusion that our unit is suddenly a meth infested hazardous and ruined building. She is at most a meth user, not manufacturing or dealing, and at this point that feels like the least of our problems.

Luckily not all of our 2014 new tenants have been a train wreck. Two are meeting and exceeding our expectations and will hopefully be around for a long time. If we can get this one property settled with a better tenant we may be well posed for a better 2015.

What I’ve learned from this tenant:

• Don’t put too much reliance on a co-signer. Don’t move forward if an applicant doesn’t have most of the move in money, and don’t use the co-signer as an excuse to be more lenient.
• Be very leery of applicants with new jobs. My screening scoring system already takes off points if an applicant has had their job less than three months, and grants points if they have had their job for over a year. Someone with no rental history and a new job have no clue about what it costs to run a household.
• Resolving differences with Bruce when we are so far apart on the best course of action is very stressful. He clearly has better rapport with our tenants, but it is so hard to wait, to know how this is probably going to end, and to stay objective.