How To Evict Old Ladies?
Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes
How To Evict Old Ladies?
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Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
6yStrange, 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.
92 Replies
- Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes6y
With the respect that all humans and in addition our elders, deserve.
Quoting a line from Fried Green Tomatoes "I'm old, I'm not a child."
I wouldn't hold it against anyone to raise the rent without a word to the tenant.
I also wouldn't hold it against anyone to work with an existing tenant because, after all, they are humans and this is where they live. We don't sell TV's to people, it's a bit more personal and significant than that.
- 6yTrey BurnsPro MemberUpstate SC · Member since 2019 · 32 posts · 38 votes
This thread has not disappointed. Has fully lived up to the subject line. Whatever you decide, thank you all for the entertainment value you've brought to my day.
- Cold Lake, AB · Member since 2019 · 12 posts · 14 votes6y
@Ronald Starusnak when I bought my 4-plex there was a fellow paying $600/mo rent while the other units go for $1,100. I met with him and explained that while I want to work with him, I simply cannot afford to rent for so low. He could not afford more so he suggested he get a roommate and they are my favorite tenants today.
Let them know your situation and see if they can help find a solution. They HAVE to know that they were getting a fantastic deal and that it wouldn't last forever.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes6y
@Karen Margrave is right. You are talking about "fair market rent", but a unit that hasn't been updated in over 15 years will require rehab to get to to "fair market condition".
Lets say it costs $6000 per unit to update. Over the course of three years, that is $166 per month. Over six years that is $83 per month. You mention section 8 pays $725 per month. Let's say that fair market for after rehab is $800 per month. Based on this scenario, with rehab costs, you wouldn't even break even at the higher rent over six years. Maybe my numbers are not right, but the point is do the math. Make sure rehab is getting the desired return.
As far as how to handle the old ladies. I like your thoughts on trying to connect them with programs to help with rent. Keeping the current tenant as a higher rate removes your rehab expense.
One idea is to increase rent to $400 effective February 1st and notify them it is going to $725 on June 1st. That puts the rent right in line with the section 8 amount you mentioned. This gives them time time to either plan for the higher expense or move.
Everyone talking about "throwing grandma out" may not be thinking of the down side in handling it this way. I would not increase rent by 2X with only 30 days notice. They probably won't have time to move and you could be stuck evicting them. So you go into court evicting an old lady, in the winter because you wanted to increase rent by over two times current rent. Even if the law is on your side, it looks bad. Wait until that story gets on to social media and spreads like wild fire.
It is far better for a landlord to work with tenants to get through these difficult situations. It is not about being a "softy", but rather the smart business decision. Helping grandma either pay more or transition out is in your best interest.
- Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes6y
I appreciate your thoughtful response, @Joe Splitrock. It's an effective business decision while maintaining integrity. I'm unnerved by some of the responses which seem downright excited about the prospect of evicting two elderly women. While it may be necessary to do, I don't see where the enjoyment is coming from.
- Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes6y
Originally posted by @Nicole Heasley Beitenman:
I appreciate your thoughtful response, @Joe Splitrock. It's an effective business decision while maintaining integrity. I'm unnerved by some of the responses which seem downright excited about the prospect of evicting two elderly women. While it may be necessary to do, I don't see where the enjoyment is coming from.
I’d be unnerved about losing 500$ a month
If your going to Subsidize their rents they can Atleast pull their weight around the place instead of just sitting around watching jeopardy in their craft- matic adjustable beds . I’d Atleast make them knit sweaters or bake cookies to sell on the open market to off set the rent loss ! If it was me I’d tape that eviction notice right to the back of their wheelchairs and wheel em out to the curb . Maybe a night out in the elements will make them improve their conduct !
- Auburn NY · Member since 2019 · 97 posts · 56 votes6y
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.
Move tenants in with small children .. and then increase their rent
- All Over, USA · Member since 2017 · 689 posts · 756 votes6y
Same way you do anyone else, with no “ragrets”.
- Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes6y
We have a lot of older tenants paying below market rate, so I sympathize.
First you gotta understand-- they will hate you, even sweet older ladies-- you are the greedy landlord now. They will likely list all of their expenses (ie: prescription drugs, phone bills, etc), and also inform you they are on a fixed income-- when you tell them it's going up. I would recommend a sliding scale, say this year it will be $500, and next year it will be $600, up until you get to market rate of $800. Be ready for a list of deferred maintenance though, when people pay tiny amounts, they won't tell the landlord about anything because they fear rent increasing- but when they are paying more (even below market rate), they want stuff fixed that they overlooked for likely years.
This immediately put you closer to market rate, and slowly increase so they can chose to stay/go. Factor in vacancy, and you're likely going to need to put in a few grand to make it really rent ready, and I think that would be a win/win.
- Auburn, NH · Member since 2016 · 234 posts · 207 votes6y
I agree with @Bryan Richardson. Have you seen their financials? Do you know they can’t afford a higher rent? Having a conversation with each of them finding out their situation and explaining to them yours will only benefit you and them.
- 6yNed J.Pro MemberInvestor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votesFigure in vacancy and the rehab costs to get you to having a unit that will pull market rent....and then how long it will take you to recoup that cost by getting up to market rent....... its likely going to be a few years if the places haven't been touched in 15+ years. I'd do small incremental increase to limit my "loss" on being below market AND to defer the $$ I'm going to have to shell out to rehab those places and limit vacancy at the same time
- Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes6y
@Dennis M. I'd be unnerved about losing $500 a month, too. That doesn't force me to be an a-hole about it. You're aiming low if all you go after sweaters or cookies. Ever have dinner made by some off-the-boat Greek or Italian grandma? The money is in the entrees, my friend.
Also, my grandma thought Jeopardy was boring as hell.
- Rental Property Investor · East Longmeadow, MA · Member since 2019 · 154 posts · 64 votes6y
the thing i love about real estate is it can and will and has created win-win-win situations.... this is an opportunity for you to do the right thing. I like what Jeremy mentioned, set up a time to talk with them and understand their situation. In my studies, I have learned situations where if you are nice to these wiser elder individuals, they may return to you a lot more than a profit. Karma is real. Some people had elder tenants who had no one. Ended up the landlord was in the will for certain items....at the end of the day do the right thing...you will not regret it and karma pays back double+...especially during the cold wintry Christmas season
- 6yMindy JensenPro MemberBiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
Eviction is for lease violations and non-payment of rent. You can't evict them.
You CAN increase their rent - but look into your state's landlord-tenant laws, because some states limit the amount you can increase at one time.
You cannot raise their rents without giving them proper notice - in most states no lease equals a month to month tenancy which requires one month notice INCLUDING one rental period. So you can't give notice today and raise rent in the middle of the next month.
It's mid-December right now, that means the earliest you can see an increase is February 1.
- Rental Property Investor · Member since 2019 · 189 posts · 62 votes6y
@Ronald Starusnak - congrats on the 11-unit! Evicting old ladies is a bit of a turn from a mobile home investment, if I'm remembering correctly! The section 8 route sounds really reasonable. I'm no lease expert, but checking with an RE lawyer on providing options between eviction, section 8 application, or a termination of housing only to welcome them back with market rents may be possible.
Caution: I'm not sure if the mechanics of the latter option is legal; I'm brainstorming here.
- Naperville, IL · Member since 2018 · 330 posts · 357 votes6y
We rent to former neighbors whom we are quite fond of. We wanted $1600, they could afford $1400. (They spent most of their retirement money paying for son in law's cancer treatment.) We know they won't move until at least one of them passes or needs a nursing home, this condo they are in is handicap-friendly all the way through and that's a damn rare thing around here. They were in their mid 80's when they moved in September 2016. We figured it wouldn't last long...those two might outlive us despite being our parent's age. They are going strong. But we are fine with it. There is more satisfaction for us in doing the right thing than in a little more money. YMMV.
- Colorado Springs, CO · Member since 2018 · 85 posts · 144 votes6y
@Ronald Starusnak - Good for you for demonstrating basic human compassion and at least trying to puzzle through a particularly prickly situation. Placing business above any sense of humanity is a failure of the soul. And who wants to do business with someone who has an ugly soul?
On the flip side, @Karen Margrave brings up an excellent point with regards to discrimination: New York State's (aspirationally-named) Human Rights Laws include a restriction on housing discrimination based on age. Discrimination includes, under these laws, providing unequal services to tenants based on their protected class status (such as age).
Therefore, if you're willing to provide extra services (e.g. setting up a soon-to-be-former-tenant with social services) to one tenant, then you'd better be willing to provide that service to all tenants, lest you find yourself on the wrong side of a discrimination lawsuit.
How does that play out in a real world worst-case scenario?
You think you're doing a good thing by offering, before upping her rent, to help the elderly lady in Unit 6 apply for Section 8 or get her in contact with Social Services. A year from now you have a 23 year old tenant in Unit 11 who you inform "rents are going up!" You don't offer her any Section 8 application help or to connect her with Social Services. And, what's more, she's friends with the elderly lady who lives in Unit 6. They get to talking and 23-year-old learns about the special treatment the elderly woman in Unit 6 got from you. She's savvy and doesn't want to leave her apartment. So she talks to an attorney or the local legal services clinic run by Syracuse University Law School (I did Tenant rights for Greater Boston Legal Services while I was at Boston U. School of Law, so it's not an unreasonable scenario), and they tell her about housing discrimination and how she can't be treated differently just because she's 23 and Unit 6 is 89.
Now you find yourself on the wrong side of a discrimination lawsuit, housing this angry tenant and paying her rent AND damages. NOT GREAT, RON. NOT GREAT.The unintended consequence of non-discrimination laws is that they sometimes lead to scenarios like this - where you have identified an elderly person as weak or in need of additional help but are required by law to treat her as any other tenant.
In other words...it's a pickle.
--break--
That said, and not to be the fun police here because I am a fun guy... (I tried to upload the Kawhi Leonard laughing gif here but I'm not sure if it worked)
but I've got to say that I'm a little disappointed by the levity with which many users (not you, Ron) are treating this situation. While I can understand gallows humor to help process or mentally manage traumatic events, these are human beings that Ron is talking about. Potentially losing your home around the holidays is pretty traumatic. Laughing at their circumstances doesn't seem funny, it just seems cruel. If this were happening to my Grandma and I presented these facts to a group of unknown business people and they made a bunch of Werther's Original jokes, I would (1) be forgiven for thinking that landlords are the awful stereotypes the media and lawmakers often make them out to be, (2) be justified in hating them forever, (3) also be justified in probably punching them in the face, and (4) probably get away with it because I'd demand a jury trial and as soon as the comments of the punched party got out, the jury wouldn't sympathize with that person either and would let me go.
Again, not trying to be the fun police. It's just that some of those comments about a potentially vulnerable population seemed gross. Maybe I'm just being sensitive, but then again people might be acting a little bit like jerks. We report, you decide.
OK! Non sequitur!
@Diane G. - ahhh...the typical mistake of the non-native NYer...assuming that the rest of the state is the city. New York City has rent control. New York State does not have universal rent control. New York City is a city within New York State that contains about half of the state's population. Conversely, about half of the state's population does not live in New York City (or even particularly like it). NYC laws, despite what they try to do in the state legislature, do not apply to the rest of New York State. Common mistake to make. Also, go Bills.
- Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes6y
Your about to get your butt whooped
- Real Estate Agent · San Luis Obispo, CA · Member since 2015 · 100 posts · 38 votes6y
@Ronald Starusnak
https://media.giphy.com/media/cFXeHuwSF00Ok/giphy.gif
- Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes6y
Originally posted by @Karen Margrave:
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.
Simply using logic, the previous owner didn't raise the rents on these people because they couldn't afford it. This has nothing to do with Male Vs. Female but if anything I'd probably be more lenient to an Older Lady just inherently. The apartments have been upgraded multiple times. Very close community, everyone knows each other.
- Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes6y
Originally posted by @Todd Rasmussen:
Originally posted by @Ronald Starusnak:
Originally posted by @Todd Rasmussen:
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!
You're right, we're taking a big potential loss here. I know the business thing to do is to tell them we are raising rents but at what point do we have to second guess what we're doing? They're most likely on SSI only.
- Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes6y
Originally posted by @Karen O.:
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.
I don't think they have been at all which is why the previous owner never felt comfortable making them sign a lease or never raised their rents.
- Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes6y
Originally posted by @Jeff Ronningen:
@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.
I don't plan to give them any breaks on rent. I knew they didn't have leases and this whole building was bought with all apartments under market rate. It will be operating over a 20 cap when we stabilize and get rents up to market. I didn't know the tenants were in a tougher spot due to age though.
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