Decent tenant now unemployed, renew lease?

Question

Hello all, I have a tenant who overall has been a decent tenant (paid rent on time, let us know if maintenance issues etc) however her lease is coming up next month and she admitted to being unemployed for the past few months. During that time of unemployment, she has paid on time with her unemployment checks coming in. I've learned some hard lessons with tenants, so I'm totally ok with not letting her renew, but also if she's been able to pay rent with unemployment maybe it can work? Anyone have additional thoughts?

Chris Seveney · Answer

@Clare Cui

I would requalify her - meaning have her provide you with unemployment amounts, how long she is able to collect and also how much $ she has in bank just like I would do for a new tenant

Clare Cui · Answer

super hepful @Chris Seveney @Jeremy Melloul @Bruce Woodruff thank you for your thoughtful and incredibly helpful replies. I'm feeling like yes, having her reapply, seeing when her unemployment runs out, money in the bank, current job search status. I'm not excited on doing a month to month because I'd like to get all my tenants locked in (my strategy is a rent by room for multiple rooms in a SFH) so I can get my leases set up to my lender for the next property. I was thinking maybe we could set up a ACH auto withdrawal from her bank or unemployment card to ensure the rent, any thoughts or complications with that? Thank you again for your response, I really appreciate it! And I agree @Bruce Woodruff, she's been a good tenant up to this point but I WILL protect myself.

Bruce Woodruff · Answer

Like they said ^^^^^ Definitely re-qualify, and go to a month-to-month lease. As you probably know, unemployment payments have a limited lifespan. Maybe she has (or can get) some additional income (Lyft/Door Dash/Etc)?

It would be a shame to lose a good tenant.....but you gotta protect yourself at the same time....

Jeremy Melloul · Answer

I agree with Chris. It's a good idea to requalify her, which means she needs to reapply for the property. Another option is to renew her lease on a month-to-month basis. This way, you're not locked into a long-term commitment and can start looking for a new tenant. If you find someone great, you can give her a notice that you won't be renewing her month-to-month lease after the specified month. This approach helps reduce your vacancy loss.

Hope this helps. Good Luck!

Decent tenant now unemployed, renew lease?

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