Tenant Late With Rent Last 4 Months, Should I Non-Renew Lease

Tenant Late With Rent Last 4 Months, Should I Non-Renew Lease

Las Vegas · Member since 2020 · 38 posts · 29 votes

I bought a property a year ago in Las Vegas. It had a pre-existing tenant who was there for the past few years.

He's been fine for the most part, signed a new lease in January with a very minor increase (I think 25 bucks).

However, the last four months he's been late with the rent. 

I believe he lost his job, but does receive unemployment. He does pay, with late fees, eventually. He's yet to pay October rent, but I believe he eventually will (he's sometimes late by 2 weeks).

He never gives notice that he's not paying on time and usually pays before the 7 day non-payment notice expires.

His lease comes up in late January and we have to send a 60 day notice (from what my property manager says) if we plan to renew the lease and/or increase rent (so sometime next month we have to send a notice).

I actually own 3 others in that community and he's paying as much as 300 less per month than some of my others.

However, this is not about the money, I own everything free and clear, this is more about headaches. I would have gladly renewed the lease with another minor increase had not all of these issues come up.

I just don't want to issue a new lease, I would rather non-renew, remodel and rent for more. There are just too many red flags of future issues.

What would you do in my position?

I'm hoping that when I non-renew he voluntarily leaves to a new place (which may be hard getting approved with him being out of work but I can't worry about that)

I've never had to evict anyone before. If he refuses to leave at the end of the lease or stops paying rent, how hard would it be to evict in the current landscape? Some of my friends have been able to evict non-paying tenants without issues, especially when there was no lease involved, but since I've never been through this before I have idea what's going on in the courts at the moment.

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Quote from @Mark S.:

My policy is that we don't renew anyone that's been late three or more times in one 12-month period. There are exceptions to every rule, but only if they are excellent in every other way.

The DIY Landlord Book4.7247 Reviews
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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y

    If he's not paid on time for the last 4 months, I would have talked to him after the first late payment.  If he's having problems paying the rent, he's probably better off finding a less expensive place to live or moving into a place with a roommate. Either way, not your problem.  Give him notice that you are not renewing the lease.

  • Las Vegas · Member since 2020 · 38 posts · 29 votes
    4y
    Quote from @Theresa Harris:

    If he's not paid on time for the last 4 months, I would have talked to him after the first late payment.  If he's having problems paying the rent, he's probably better off finding a less expensive place to live or moving into a place with a roommate. Either way, not your problem.  Give him notice that you are not renewing the lease.

    My property manager has had several convos with him. Every time it's a different excuse with the unemployment money being late or pushed back. He said he had a new job coming, but they were waiting for the background check to get approved. I have no idea what he's going to say for this month. He's already had three 7-day notices, but always pays - with late fees - before the notice is up and we move to potential eviction.

    What's funnier is that the last convo the property manager had with him in September, he said he wouldn't be late again and was asking her about upgrading the flooring in 2023 and expressed concerns regarding a potential rent increase in January - and then he's late again. As you stated, forget an increase, it's time to part ways.
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y
    Quote from @Mark S.:
    Quote from @Theresa Harris:

    If he's not paid on time for the last 4 months, I would have talked to him after the first late payment.  If he's having problems paying the rent, he's probably better off finding a less expensive place to live or moving into a place with a roommate. Either way, not your problem.  Give him notice that you are not renewing the lease.

    My property manager has had several convos with him. Every time it's a different excuse with the unemployment money being late or pushed back. He said he had a new job coming, but they were waiting for the background check to get approved. I have no idea what he's going to say for this month. He's already had three 7-day notices, but always pays - with late fees - before the notice is up and we move to potential eviction.

    What's funnier is that the last convo the property manager had with him in September, he said he wouldn't be late again and was asking her about upgrading the flooring in 2023 and expressed concerns regarding a potential rent increase in January - and then he's late again. As you stated, forget an increase, it's time to part ways.

     There is nothing stopping him from getting another job while he's waiting for the background check.  You are right, time to let him go.  Also tell the PM not to accept the late payment and proceed with the eviction if needed.

  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y
    Quote from @Mark S.:

    My policy is that we don't renew anyone that's been late three or more times in one 12-month period. There are exceptions to every rule, but only if they are excellent in every other way.

    The DIY Landlord Book4.7247 Reviews
  • Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
    4y

    If you were closer to market rents, then this may be more of a coin-flip decision.  It sounds like with some minor improvements, you'll end up getting significantly more rent.  I'd probably go that direction.  

  • Investor · Troy, NY · Member since 2020 · 120 posts · 93 votes
    4y

    Too much anxiety to sit & wait to see if I'm going to get paid every month! 

    Seems like you already have your ducks in a row if you are posting pay or vacate notices. Send the non-renewal, move on, get the unit closer to market rent & make that $$. 

    Also, the fact that he never tells you that he's going to be late would be the icing on the cake for me. Best of luck!

  • Rental Property Investor · Prince George's County, MD · Member since 2022 · 177 posts · 187 votes
    4y

    Sounds like you've answered your own question.  Besides, why renew a lease with a late-paying tenant??

    Regarding possible eviction, you need to consult with an experienced eviction attorney now to prepare.

    A word of advice:  Take the emotion out of it.  His circumstances are unfortunate, but they're not yours to consider.  This is business.  You're in business to make money with minimal headache.  He is no-longer an ideal tenant, move on to the next.

  • Member since 2022 · 142 posts · 61 votes
    4y

    Sounds like you answered your own question. lol Tell him to move and remodel and rent it for market. This is a business. I know lots of landlords that get caught up with their tenants issues but you have to look at this as a business and a business has to be profitable. In my state Connecticut a tenant has to be not paid past the 10 day to evict. I don't know what courts are doing in your state. You need to contact a local attorney and find out what your options are. Shop around because some attorneys charge by the hour and some have one fee for eviction. Best of luck

  • Member since 2022 · 142 posts · 61 votes
    4y
    Quote from @Malkia Ra:

    Sounds like you've answered your own question.  Besides, why renew a lease with a late-paying tenant??

    Regarding possible eviction, you need to consult with an experienced eviction attorney now to prepare.

    A word of advice:  Take the emotion out of it.  His circumstances are unfortunate, but they're not yours to consider.  This is business.  You're in business to make money with minimal headache.  He is no-longer an ideal tenant, move on to the next.


     I like how you think. Lol 

  • Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    4y

    @Sylvia H. Ask yourself what will get better?

  • Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
    4y

    I have several tenants that aren’t at mkt rent that have been with me a while and I’m against rocking the boat since they never bother me and are ideal tenants.  I still make plenty of them, they have affordable rents, and I don’t have the risk of the unknown with a new tenant so everyone is winning.  If they were a headache I’d get rid of them or at a minimum charge above mkt rents to be compensated for my time.  Life is short and tenants are plentiful most places.  Also how in today’s job market don’t you have employment after 3 months everyone is hiring here at least.  

  • Ned J.Pro Member
    Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
    4y

    I'm surprised no one has replied " he eventually pays and with late fees, so I make even more $$, so I'd keep him".....there are usually a few in that camp lurking around

    I dont like being jerked around....excuse after excuse....promise after promise broken..... nothing changes. Be honest and hold to your end and we can work together.... keep jerking me around and I'm done with you. 

    I'm not renewing....... only thing I would even remotely consider doing...... M2M..... one more late and you are gone. no exception. 

  • Las Vegas · Member since 2020 · 38 posts · 29 votes
    4y
    Quote from @Ned J.:

    I'm surprised no one has replied " he eventually pays and with late fees, so I make even more $$, so I'd keep him".....there are usually a few in that camp lurking around

    I dont like being jerked around....excuse after excuse....promise after promise broken..... nothing changes. Be honest and hold to your end and we can work together.... keep jerking me around and I'm done with you. 

    I'm not renewing....... only thing I would even remotely consider doing...... M2M..... one more late and you are gone. no exception.  If they guy would have at least given my property manager a head's up - 'hey, I'm going to be late, I'll pay with late fees by this date' - this would be fixable.

    If the guy would have at least given my property manager a head's up - 'hey, I'm going to be late, I'll pay with late fees by this date' - this would be fixable. But to sit around every month, wondering when - and if - he will pay, is not worth the bother.

  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    4y
    Quote from @Nathan Gesner:
    Quote from @Mark S.:

    My policy is that we don't renew anyone that's been late three or more times in one 12-month period. There are exceptions to every rule, but only if they are excellent in every other way.


     Softie 🤣. More than one late in first 12 months and they're gone. We only do M2M after initial term so any late problems after that and it's adios.

    Skyline Properties
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  • Real Estate Agent · Milwaukee · Member since 2022 · 57 posts · 25 votes
    4y

    @Mark S. short and sweet, get rid of him. Especially in today's market, as long as you are willing to remodel, you should be collecting as much as you can for a better CoC ROI. Evictions, at least in Milwaukee, are not that big of an issue as long as you keep up on the paperwork and information.

  • Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    4y

    Agree. And there is a difference between eviction and non-renewal of lease!

  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    4y

    @Mark S.

    I have a tenant like this and it’s really annoying. Plus she was way under market rent so I just wanted to get rid of her and non renew. I told her I was raising rent from $1290/month to $1750/month. I assumed she would move out and move on. Wrong! She stayed and signed a month to month lease with me in June. She’s still late every month but she pays up with a late fee every month. So for me, raising her rent an extra $460/month made her annoyance not as bad. lol. The annoying ones like this get market rent. The good ones get to stay well under market rent. It’s not about the money for me. It’s more about the annoyance and hassle with the bad ones.

  • Melanie ThomasBusiness Member
    Real Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 490 votes
    4y

    Yes, I would recommend a non renewal. Get him out and a new tenant that can pay market rent. Ive learned to always trust my gut. You are already seeing the red flags, don't ignore them. In Texas we are not having any problems evicting folks. Good luck and happy investing!

    RentWerx Property Management4.73308 Reviews
  • Property Manager · Henderson, NV · Member since 2018 · 501 posts · 317 votes
    4y

    @Mark S. If there have been no other lease violations then I would consider renewing the lease at market rent.  I would also ensure that you are charging late fees 5% of the rent and that it is specified in the lease that payments after the 1st are due in certified funds (cashiers check or money order).  If there are other lease violations, besides late payments, then I would non-renew.  In the renewal offer letter/notice of rate increase specify the new rate as well as any new provisions that will be in the renewal lease.  I also suggest send in the renewal offer asap and make it clear in the renewal offer that the tenant is to sign the renewal within 7 days of receipt of the letter.  If there is no response then provide your 30-60 day notice for tenant to vacate. 

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