How To Evict Old Ladies?

Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes

Hey guys, I have a sad situation that I am going to be involved in soon. I am closing on an 11 unit building and two or three of the tenants have been living at their apartments for 15+ years and only paying $300/month for a 2 bedroom excellent condition apartment with utilities included. They're older and would probably find it difficult to find new housing but they don't have leases. The current owner just didn't want to raise their rents and cause them trouble nor did he take the time to renew their leases. I can't just let them stay paying this rental rate though. Any ideas? The only thing I could think is get them with a social worker who can help them get on section 8 or public assistance to be able to pay us market rent.

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Karen MargraveBusiness Member

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Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes

Strange, because nowhere in your post did I see where you'd talked to the women and explained the situation to them, and asked if they would be able to pay the rent, or even how much the rent was going to be. In all the time they've been there, has any investment been made into their units, and are they identical to the higher market rent apartments?

This old lady thinks you need to show them some respect, and deal with the women as you would others in business. If they can't afford the rent, tell them you'll be asking them to move, and then give them the notice required in your state, before you find yourself on the other end of a discrimination lawsuit.

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Ronald Starusnak
OP
Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes
6y
Thanks, I'll keep everyone on BP updated
1 Reply
Dennis M.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
6y
It’s not your responsibility to find them handlers or advocates .give them plenty of notice to figure it out . Seems they’ve saved many thousands of dollars over the years that’s for sure . Obviously this doesn’t make business sense because You can’t be losing thousands a year subsidizing their rents.
9 Reply
Bryan Richardson
Rental Property Investor · Indianapolis, IN · Member since 2018 · 189 posts · 141 votes
6y
@Ronald Starusnak do you have to evict them? Just tell them you have to raise rents, see what happens. What is the market rate your needing.
24 Reply
Todd Rasmussen
Rental Property Investor · Clarksville, TN · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Ronald Starusnak
It's two weeks before Christmas!!!
Sorry, had to throw in an extra jab. We had a very similar situation with a duplex we inherited a tenant in. Around this time of year too. When we acquired it we had the property manager have a discussion with him about the rents. He told her that he couldn't afford any more, we struck out looking for social programs to assist (they weren't taking new cases), so we gave him three months notice to move out (It helped that he caused me $500 in come back fees for an appraisal and yelled at my property manager). He ended up needing to stay "just a little longer" than that notice but claimed he could pay closer to market rent than he previously let on. A year later and he's paying about 85% of market. We'll probably step it up slower than we would normally on account of his situation, but we are in a good position with the cash flow and he's never leaving until we price it out of his range (so no turnover cost) and never calls for anything trying to fly under the radar so that's been working for us.
If you don't handle the situation today it will only be more pitiful and harder tomorrow. Depending on your strategy, you need to either take the bandaid approach or start to incrementally raise rents until they decide to move on to somewhere else. You might find out that they can make rent happen at levels higher than they are letting on.
How much are they below market rents and what's the cap rate in the area? You see where this is going...
8 Reply
Ronald Starusnak
OP
Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes
6y
Originally posted by @Todd Rasmussen:
@Ronald Starusnak
It's two weeks before Christmas!!!
Sorry, had to throw in an extra jab. We had a very similar situation with a duplex we inherited a tenant in. Around this time of year too. When we acquired it we had the property manager have a discussion with him about the rents. He told her that he couldn't afford any more, we struck out looking for social programs to assist (they weren't taking new cases), so we gave him three months notice to move out (It helped that he caused me $500 in come back fees for an appraisal and yelled at my property manager). He ended up needing to stay "just a little longer" than that notice but claimed he could pay closer to market rent than he previously let on. A year later and he's paying about 85% of market. We'll probably step it up slower than we would normally on account of his situation, but we are in a good position with the cash flow and he's never leaving until we price it out of his range (so no turnover cost) and never calls for anything trying to fly under the radar so that's been working for us.
If you don't handle the situation today it will only be more pitiful and harder tomorrow. Depending on your strategy, you need to either take the bandaid approach or start to incrementally raise rents until they decide to move on to somewhere else. You might find out that they can make rent happen at levels higher than they are letting on.
How much are they below market rents and what's the cap rate in the area? You see where this is going...

Section 8 pays $725+ for this apartment. We don't want to just be at section 8 rates either.
1 Reply
Yonah WeissPro Member
Cost Segregation Expert and Investor · Lakewood, NJ · Member since 2017 · 1k+ posts · 1k+ votes
6y
This is not a fun situation to be in. I don't envy you @Ronald Starusnak. Then again, you could convert the units into assisted-living, get their insurance to cover it, and everyone's happy!

9 Reply
Lee Bell
Real Estate Appraiser · Isabella lake, CA · Member since 2018 · 628 posts · 491 votes
6y
Regardless of some of the funny lines LOL, wait until after Christmas and raise the rents.
2 Reply
Peter TverdovBusiness Member
Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
6y
Tell them “Murder She Wrote” is no longer airing in your area.
[email protected]732-289-3823
14 Reply
Karen MargraveBusiness Member
Moderator
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
6y
Strange, because nowhere in your post did I see where you'd talked to the women and explained the situation to them, and asked if they would be able to pay the rent, or even how much the rent was going to be. In all the time they've been there, has any investment been made into their units, and are they identical to the higher market rent apartments?

This old lady thinks you need to show them some respect, and deal with the women as you would others in business. If they can't afford the rent, tell them you'll be asking them to move, and then give them the notice required in your state, before you find yourself on the other end of a discrimination lawsuit.
33 Reply
Account Closed
Specialist · San Antonio, TX · Member since 2012 · 865 posts · 351 votes
6y
@Ronald Starusnak

You would have more sympathy if you were evicting old men it appears. If you don’t believe me look at the post by @Karen Margrave above.
In all seriousness you would need talk with them and explain the situation.
7 Reply
Julie Dillon
Member since 2019 · 28 posts · 22 votes
6y
@Ronald Starusnak
Don't assume they're poor or for that matter, don't make any assumptions. Present your facts and let them do the same. Then make a decision. Best wishes!
14 Reply
Todd Rasmussen
Rental Property Investor · Clarksville, TN · Member since 2016 · 1k+ posts · 1k+ votes
6y
Originally posted by @Ronald Starusnak:
Originally posted by @Todd Rasmussen:
@Ronald Starusnak
It's two weeks before Christmas!!!
Sorry, had to throw in an extra jab. We had a very similar situation with a duplex we inherited a tenant in. Around this time of year too. When we acquired it we had the property manager have a discussion with him about the rents. He told her that he couldn't afford any more, we struck out looking for social programs to assist (they weren't taking new cases), so we gave him three months notice to move out (It helped that he caused me $500 in come back fees for an appraisal and yelled at my property manager). He ended up needing to stay "just a little longer" than that notice but claimed he could pay closer to market rent than he previously let on. A year later and he's paying about 85% of market. We'll probably step it up slower than we would normally on account of his situation, but we are in a good position with the cash flow and he's never leaving until we price it out of his range (so no turnover cost) and never calls for anything trying to fly under the radar so that's been working for us.
If you don't handle the situation today it will only be more pitiful and harder tomorrow. Depending on your strategy, you need to either take the bandaid approach or start to incrementally raise rents until they decide to move on to somewhere else. You might find out that they can make rent happen at levels higher than they are letting on.
How much are they below market rents and what's the cap rate in the area? You see where this is going...

Section 8 pays $725+ for this apartment. We don't want to just be at section 8 rates either.

So conservatively, you are taking a $18,000 hit to NOI by having those rents at $300 instead of $800. Even if the CAP rate in your area is 10%, that's still costing you $180,000 in property value. If that doesn't motivate you to start ratcheting up rents, nothing will!
6 Reply
John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
6y
I agree with @Julie Dillon, You're making a lot of assumptions regarding their financial means. As others mentioned, just share with them your plans, ie what you need to raise the rent to. I'm sure they're well aware they're paying under market rents. They may (likely) move but that's going to be their decision.
Also, don't use the term "evict" if what you're talking about is lease non renewal. If they're on a month to month, most states require a 30 day notice but sometimes a 60 day notice for a rent increase.
What I would do is tell them the rent is going to increase significantly in the future. Then I'd let them know about the end of December that the new rent amount will take effect March 1st. That gives them plenty of time to work out a plan.
6 Reply
Karen MargraveBusiness Member
Moderator
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
6y
@Account Closed you obviously missed the point.
2 Reply
Marian Smith
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
6y
@Ronald Starusnak one person in two bedroom apartments? Maybe two of the ladies can be roommates.
6 Reply
Karen O.
NYC, NY · Member since 2016 · 617 posts · 456 votes
6y
Don't assume these ladies have been living the high life while paying $300/mo. I have one such relative (near 80) who lives in a 4th fl walk-up. Been there 55+ years and the LL wants her out so he can raise the rent to 500%. She's covered by rent control, but if she gets ill she'd likely have to go live with someone because despite working for over 50 years, her monthly take home is such that she couldn't afford much more and hasn't qualified for other subsidized senior housing.
Your ladies may be on fixed incomes. They may qualify for small pensions + miniscule SocSec benefits which have not kept up with true COL since they now pay for part of Medicare. They may have worked in jobs that didn't pay much or didn't require SocSec withholding and so may not be eligible for it. And with the
cost of phone, food, insur and medicine, even tv is no longer free, they may be living on the financial edge.
So speak with them and let them know what the rent should be and how you plan to get there.
You're in business to make $, but you can do good while doing well. And ask yourself how you'd want a new investor to treat these folks if they were your elderly relatives.
16 Reply
Pat L.
Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
6y
Originally posted by @Lee Bell:
Regardless of some of the funny lines LOL, wait until after Christmas and raise the rents.

@James Wise,

I know someone who would just do it

before Xmas

We had 2 we inherited that had been ensconced for 14+ years for $425/month. We doubled the rents, but upgraded the furnace (it needed it), HW tank from electric to NG & gave them a scratch & dent stove, washer & dryer that we keep in stock. They probably saved the difference in rent just in electric & heating costs.
3 Reply
Jeff Ronningen
Investor · Cincinnati, OH · Member since 2015 · 242 posts · 182 votes
6y
@Ronald Starusnak. First off I’m sure you knew about this before entering into a contract to purchase, so it should be factored in. I’ve had situations which were somewhat similar. It seems that you’re assuming these tenants cannot pay more, do you really know that until you talk to them? Do you know if they qualify for section 8? I would either stair step them up or keep rents the same for a few months if they agree to move out. Charity is important but I generally keep giving separate from business. If you decide to continue to give these tenants a $400-500 break on their rent that’s your choice.
0 Reply
Justin Polston
Property Manager · Shelbyville, IN · Member since 2014 · 303 posts · 161 votes
6y
@Ronald Starusnak can you let them pay you in caramels or hard candies? They probably have that if they don't have the cash.
Also, are you worried about damages from the cats?
4 Reply
Dominique Palmer
Rental Property Investor · New Orleans, LA · Member since 2018 · 87 posts · 45 votes
6y
@Lee Bell what would be the reason for waiting until after christmas?
0 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
6y
Originally posted by @Ronald Starusnak:
Hey guys, I have a sad situation that I am going to be involved in soon. I am closing on an 11 unit building and two or three of the tenants have been living at their apartments for 15+ years and only paying $300/month for a 2 bedroom excellent condition apartment with utilities included. They're older and would probably find it difficult to find new housing but they don't have leases. The current owner just didn't want to raise their rents and cause them trouble nor did he take the time to renew their leases. I can't just let them stay paying this rental rate though. Any ideas? The only thing I could think is get them with a social worker who can help them get on section 8 or public assistance to be able to pay us market rent.

What's the market rent for their $300/mo units?
0 Reply
Diane G.
CA · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Ronald Starusnak
NY has rent control.... how can you raise rent?
2 Reply
Javier D.
Investor · FL · Member since 2017 · 266 posts · 220 votes
6y
@Ronald Starusnak
Best thing you can do is give them ample time to make their own decision. If its ok with the seller..maybe utilize this time before purchase to extend that notice of rent increase to market.
If you want to do some charity work or donate some of your full market rent income once you have it, may I suggest something in mental health awareness or to help veterans. Maybe feed some starving kids. Your willingness to help others could stretch farther if your real estate business is at its full potential.
Congrats on your purchase!
1 Reply
Bob Prisco
Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
6y
@Ronald Starusnak how much more are you going to get with new ? If only 100 more leave them alone. It will cost you a few k to get them rent ready again , two three months for new tenants do the math . No headaches while earning a little less , I will take that any day.
0 Reply
Larry Alexander
Fort Collins, CO · Member since 2019 · 158 posts · 117 votes
6y
@Karen Margrave - I missed the point too. What was it. All I got was your assumption that @Ronald Starusnak was being disrespectful; "show them some respect". But then I dropped out of school and a lot of things go over my head.
1 Reply

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