Well, after six years, I finally have my first eviction. I'd been getting pretty smug about my property management skills, so I guess I was about due. I'm writing this post because in looking back, I can see I made a number of dumb mistakes that someone with my experience should not have made. (These are pretty obvious lessons that have been repeated over and over again on BP, but I figure one more time probably can't hurt.)
These particular tenants gave off warning signs from the beginning. When I was getting ready to execute the lease and had sent them a draft lease, they disappeared for about a week (no communication, nothing). I wrote them off and continued to market the property when, about ten days later, they popped back up with some baloney story about a death in the family and begged me to lease them the property. Normally, I wouldn't have rented to them due to their unreliability right off the bat, but this was in the middle of the holidays and things were dead, so against my better judgment, I rented to them. This was also a new property so I was a little less sure about rents I could get.
Lesson: Do not ever, ever, ever rent out of a sense of desperation or simple need to lease the property. If someone gives you a bad vibe or is a flake right off the bat, don't rent to them. I should have just waited.
I was super strict with them about timely payments and late fees initially. Long story short, they were good tenants at first, then they got flakier and flakier, and finally the husband lost his job. I could see an eviction on the horizon, but I kept trying to work with them. Payments were later, communications more sporadic (they were more unresponsive). I did keep as firm a control on them as I could. Notices to vacate were promptly sent and late fees were collected.
Lesson: Always send promptly send your notice to vacate and collect late fees. There is no reason not to if the tenants haven't paid rent on time. (It's not like you have to file suit if you send, but you at least can go ahead and do so.)
Well, now they've stopped paying and communicating and I'm going to court this morning.
Lesson: I should have just gotten them out ASAP. I shouldn't have screwed around and kept working with them month after month. When they showed an unwillingness to communicate, I should have pulled the plug. Now I will be evicting them in the middle of the holidays and be right where I was a year ago. (Probably worse because I've got court fees and likely repairs to make.)
There are several upsides to all of this: (1) They are my worst tenants, once they are out my life will get a lot better (Pareto principal and 80/20 rule); (2) I'm learning the eviction process, so it's kind of fun for me (I'm a lawyer, so I'm probably enjoying it more than I should); and (3) I've taken yet another lesson in the school of hard knocks but it's unlikely I'll make this screening mistake again.
The weird thing is that I'm not even really that mad about all this. It's just a cost of doing business.
Lesson: If you start managing enough properties, after enough time you will have an eviction. (Think of that line from Fight Club, "On a long enough timeline the survival rate for everyone drops to zero.") I thought I was immune because I buy nicer properties and try to be diligent with screening. I learned I'm not. Just roll with the punches and keep cool. It's just business.
Exactly John, it's just business, at least they won't have snow after Christmas to move in (LOL).
Reading people up front is really crucial and go with your instinct, you can always find an "official" reason. :)
I've been managing properties for years and just today started my very first eviction. I also felt pretty good about my skills in assessing new tenants. Well, my luck finally ran out. :)
I agree with all of your points above. The most important thing is to get on it early. Don't give them weeks and weeks of free rent, to go along with all of their excuses why it wasn't paid on time.
Great post, thanks for sharing.
I'm a bit of a stickler on NOT working with tenants when they start to fall behind. The lines are drawn when the lease is signed. If they step over it and you draw a new one, you are asking for more problems in the future. Some may call me heartless, but this is business. My lenders don't give me a break so I can't hand them out either.
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