Advice greatly appreciated

20 Replies

Recently I leased my first rental unit. The tenant moved in in the middle of the month of February. Right out of the gate she was unable to pay rent for March until half way through the month. I was understanding due to the fact that she had recently paid the one months rent deposit as well as the prorated rent for February. Now in April she once again was unable to pay the until the 13th. Not only was she late but this time she was short $295 including the late fee.

I sense a theme here and I would like to nip this thing in the bud. Does anyone have any suggestions as to how I can handle this problem? She is two months into a 12 month lease. She says she will pay the balance on the 26th. Which leads me to believe that come the 1st, the cycle continues. I'm trying to work with this lady but at the same time I have obligations myself. After all this is a business not a charity.

It doesn't sound like is going to stop. It's hard when you're nice because then they take advantage and think this is ok. It looks like she is going to be one month behind which will quickly turn into two months behind. I would start the eviction process immediately to get her out of there or get her back and track and show her what is expected.

If she is not paying her rent, and your rental agreement gives you the right to evict her, do it. You have a business to run, and if it is starting off bad, it will only continue.

You are right, this is not a charity.

The other thing I would advice is to try and figure out what you may have missed in the initial interview and application process, to avoid this in the future.

@Ivan Burley if I were you I would find out the quickest path to evict a tenant in your state and proceed. You can definitely find a better tenant than that.

@Michael Moikeha is right. You should expect this will only continue for the next 10 months, so get rid of her now. Being short on rent is violation of the lease, period. And paying the balance owed for the month on the 26th is entirely unacceptable. If you don't have May rent by the end of 1st week, begin the process to EVICT!

Ditto to the advice given above. You are new to landlording. All the experienced landlords were new to landlording at one time, so you are not alone. Some learn from their mistakes and some do not. Please read the following in it's entirety. It will help you now and will help you recover. Good luck!

http://www.biggerpockets.com/forums/52/topics/23212-the-top-5-landlord-mistakes

Thank you everyone for the sound advice. I had already made my mind up to begin the eviction process. I planned to give her a chance to have May paid in full. If she is unable to pay by the 5th then I will move forward with the eviction. I am determined to be successful in this business and I know to do so you have to be disciplined and tough. Fortunately I possess both traits. I will give someone a chance to do right, she's had her chance.

These helpful responses assure me that I am making the right decision. Do you guys handle most evictions yourselves or is a lawyer the better op

Just make sure you present the eviction in writing so your stance can not be skewed. Only bring a lawyer in if she tries to take it to that point.

Evict her now. Do not give her any more chances. Get rid of her and get a good tenant. THe question you need to ask yourself is what you may have missed in the screening process. Do they make 3X your monthly rent, did you verify employment, were you able to talk to a previous landlord?

"Don't mistake kindness for weakness."

A. Capone

I've even apologized for the eviction process..."I'm sorry, this isn't personal, but this is a business and I have to protect myself. You've left me no choice here."

You're doing the right thing with the eviction @Ivan Burley and you've got everyone's support! It's your business as you've said and only you can make it successful!

Thanks everyone. I will be starting the eviction process the first week of May. I am nearly certain she won't be able to make her rent for next month. I'm hoping that she'll at least clear the April balance and then I'll move forward ith the eviction. There may have been a few things I missed during the application process.

The main thing was the 3x the rent. I verified her employment and she had no previous evictions. In the area that my rental is in it may be hard to find someone who earns 3x the rent. I'll try to do a better job screening the next tenant. Thanks everyone for the supp

Originally posted by @Ivan Burley :
Thanks everyone. I will be starting the eviction process the first week of May. I am nearly certain she won't be able to make her rent for next month. I'm hoping that she'll at least clear the April balance and then I'll move forward ith the eviction. There may have been a few things I missed during the application process.

The main thing was the 3x the rent. I verified her employment and she had no previous evictions. In the area that my rental is in it may be hard to find someone who earns 3x the rent. I'll try to do a better job screening the next tenant. Thanks everyone for the supp

While getting the biggest security deposit upfront might sound like a deal killer- it does allow for a higher percentage of qualified applicants. Someone that doesn't have a at least a few hundred in their checking account is living paycheck to paycheck.

I know plenty of people making good money who are almost always behind on rent. You did the right thing by posting here, as the people above have given you some great advice. Don't forget to become one with your state's landlord/tenant laws!

How was their credit check? How was their rental history with the prior landlord check?

I'm going through this now...after evicting another non-paying tenant in March. It's unpleasant, but as @Walter Ichikawa-Doyle says, it's a business and you need to protect your interests. My current non-paying tenant is in a low/no income area and no tenant makes 3x the rent. And in NJ, the security deposit is limited to 1.5 month's rent. My tenant was good for almost 2 years...she was late the last 2 months, paid the late fees and said it wouldn't happen again. Well, she hasn't paid anything this month and her court date is May 2nd.

The longer you wait, the more you lose.

@Ivan Burley while non-payment is totally unacceptable I would suggest perhaps trying a different track. She appears to be on a pay check schedule of two weeks or twice a month. Get her on a payment plan that matches her pay check. Charge her $20 more per time for the service. Get her on an ACH debiting service that takes the money from her account the day after she is paid. She might actually be able to pay rent then and you will collect a bit more rent as well. Win-win. If she can't keep up with that then have a heart to heart and have her move or be evicted. Ideally eviction is the last resort as it will cost everyone the most money. Let us know how it goes.

Actually Bill, I did yhink about that option. I know that she is paid every two weeks as we have discussed it. I just am worried that if I set the payments for the 14th ect.. and she doesn't pay then we'll already be half way through the month and way behind.

Aly, my rentals area sounds similar to yours. There's not much income and even fewer qualified tenants.

Her credit score wasn't spectacular or even good really, but it wasn't awful either. I dropped the ball on the previous landlord inquiries

There's been a number of good tips already...Here are a few thoughts:

1. When you checked the credit, did you pull a full report that shows debts and potential dings on their credit? That is very valuable and shows their ability to pay, what their car loan might be, other debts like student loans. Sometimes debts add up and cut quite a bit into that 3x rent number. Pretty inexpensive and I charge an application fee that covers the credit check for adults 18+ living in the apartment. A lender you have a good relationship with will be happy to pull the credit report for you, and you can reimburse them with the application fee. Some of the codes are not clear in the report; don't be shy to ask the lender.

2. I like rental applications that ask for 2 previous landlords. This is your best chance to get real information about their history and how the applicant will conduct themselves. I ask for and call employers and personal references, but never really expect to hear negatives from these sources.

@Ivan Burley - You have gotten a lot of good advice above. I'll simply add that I have tried to 'be nice' and work with people before. With 1 exception, it has cost me money every time. The tenant eventually gets so far behind that the amount owed is insurmountable and they give up even trying. On May 1, she will owe 1 month rent + $295 and late fees. I wouldn't even wait until the 5th to start the process.

BTW, make sure you understand the eviction process and follow it exactly. In Louisville, we have to send a 7-day letter and wait until the time frame expires before attempting to schedule a court date. Also, if the property is owned by an LLC, an attorney has to represent the landlord. (I personally think this is great as I don't have to go to court :) .

Erik Hitzelberger, Real Estate Agent in KY (#68970)

@Ivan Burley I understand she is two weeks behind and that she probably won't get caught up. Perhaps you could agree to start fresh and defer the late rent and wipe it out if she pays the remaining of the rent (to end of lease period) on time via your debiting service on the bi-weekly payment plan (remember to charge more for this). Sounds like she may have started out a bit in the hole. Have her sign an agreement so that if she does default then you can still add that to the judgement. Two weeks rent is much less than the cost of an eviction not to mention the time lost while getting her to vacate.

Again this only works if you are debiting her bank account. You need to take the decision of whether or not to pay rent from her. If she doesn't have a bank account then try and get her to move on her own (asap) while pursuing the eviction in parallel.

Evict and always start the eviction process the second someone is five days late regardless of how good they usually are.

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