Paying bad tenants to leave?

8 Replies

A local investor recently told me she has done dozens of evictions over the years and has never been able to collect a penny on any of them.

Therefore she started using a new approach of paying the tenants $100-$200 to move out within 1-2 weeks.  The cost just to file the eviction is over $100 so it sounds like it may be a good idea.  She's had some pretty good results with this approach and I was wondering the thoughts of the BP community on this.

Best of success!

It's called CASH FOR KEYS and not uncommon, but sometimes a bitter pill to swallow. Being proactive is better.  Have clear rental criteria, an effective tenant screening method, and a comprehensive rental agreement in place. Be swift, polite, firm and fair in enforcing the terms of the rental agreement before it mushrooms out of control.

Marcia Maynard, Fischer Properties | Podcast Guest on Show #83

I once paid $50 to a crackhead for her keys and had her sign a paper.  She then kept hanging around the building so I called the police.  The police didn't want to see her homeless so they made me let her back into her empty apt.  I never saw the $50 again.  You really need ironclad documentation if you do this.

I vote for the standard eviction. No pay, no stay. Cash for keys in theory is great. A lease in theory is great too but the tenant isn't doing what he or she is supposed to with the lease (the whole reason you are considering cash for keys) so what makes you think he or she will uphold a cash for keys agreement?

I have found cash for keys works much better in a foreclosure / REO situation versus an eviction / non-paying tenant situation.

We have taken that a little further. We have actually, physically moved the tenant to a new apartment and paid the security deposit because in most cases they don't have the money up front to move. However, living in a small town I know alot of the landlords and we help each other out many times with tenants problems. 

7574057336 | http://msedlacek.kw.com | VA Agent # 0225223133

@Mike Sedlacek

 Interesting approach but I have a question for you. You are moving the tenant into another landlord's property so do they know that they are problem tenants and this is your way of evicting them?

Just curious to understand why some one take your problem tenant.

Originally posted by @Mike Sedlacek :

We have taken that a little further. We have actually, physically moved the tenant to a new apartment and paid the security deposit because in most cases they don't have the money up front to move. However, living in a small town I know alot of the landlords and we help each other out many times with tenants problems. 

 so u basically pass each other a hot potato? that's great friendship you have going.  how do u trust each other if you move a bad tenant from one to another? 

I have a lawyer friend who owns a 12 unit  older building and he has problems renting so he will take a tenant as long as they qualify for social services which we have lots of tenants that do.  One of the first things we don't want the tenant to do is to go to the attorneys for social service recipient. The local judge doesn't like to hear cases involving them. They usually take longer to get a court date. So we try to avoid this and get them moved out as easily as possible.

7574057336 | http://msedlacek.kw.com | VA Agent # 0225223133

We have great success with cash for keys, we have yet to have an eviction.  Evictions take time and time is money.  If they are out by the deadline they get the full amount, if they miss the deadline we'll give them about $50.  We try to figure out what their barrier to moving out is (need gas, need help moving) and fund it.