Tenant struggling to pay rent on time

Accountant · Los Angeles, CA · Member since 2020 · 8 posts · 1 vote

Hi All,

Someone moved in to my first rental property. She is struggling to pay rent on time. its only the first month. I asked for the first and last rent and she is still short. Any advice on how to move forward? I have a $2600 mortgage and I want to get ahead of this problem as soon as I can.

Thank you in advance,

Nicole

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

Never let them move in until you have ALL the money. it rarely gets better frankly.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Never let them move in until you have ALL the money. it rarely gets better frankly.
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Matt Devincenzo
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
4y
In Socal first and last isn't particularly common, but obviously you're free to do that if you choose. I collect first and security deposit only. Unless 100% of funds are paid then there is no key provided or move in etc.
So to get back on track at this point you need to sit down and figure a plan out with the tenant. My suggestion would be come up with a 3-6 month payment plan with them. I'd never suggest that in advance, but since you already let them move in you need to correct the problem you created.
The other possible solution is to sign an addendum eliminating the last months rent payment at this point. Again collecting last month's rent is not common in Socal, so eliminating it is in my opinion not a big deal.
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y
She knew first and last and deposit was due. You shouldn't have given her the keys until those were paid and the deposit should have been done as a non-refundable deposit when she signed the lease to 'hold' the place. When she moved in, it would have converted to her damage deposit.
I've never done last month's rent up front. You could remove that (being paid up front, she still needs to pay it when the time comes). Having someone come up with essentially 3 months rent plus moving expenses and deposits for utilities is a lot. If you don't want to remove the last month rent being paid in advance, do it in installments over 3 months.
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Katelyn Andrews
Real Estate Agent · Middle Georgia · Member since 2020 · 54 posts · 32 votes
4y
We require deposit and first months rent before keys are even given.
A lot of landlords require deposit, first months rent, and last months rent before they get the keys.
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Katelyn Andrews
Real Estate Agent · Middle Georgia · Member since 2020 · 54 posts · 32 votes
4y
We require deposit and first months rent before keys are even given.
A lot of landlords require deposit, first months rent, and last months rent before they get the keys.
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Jordan B.
Real Estate Agent · Long Island NY · Member since 2017 · 89 posts · 33 votes
4y
Did she have substantial savings when you screened her? Sounds like she may be playing you..
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Account Closed
Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
4y
If your mortgage is 2600 assuming rent is more than that. So first/last/security adds up to probably close to $9K. That is a lot to ask from someone to move in. Most renters dont have that much liquid cash. You could drop the last month and if she is current going forward you should be fine.
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Michael Conte
Member since 2020 · 23 posts · 5 votes
4y
@Katelyn Andrews I'm curious as to what your avg rental rate is. I just moved new tenants in a few weeks ago requiring 1 month and 1.5 month security deposit. Rent is 2400 so that came to 6k to move in. If I included last month's rent as well it would have came to 8,400 which to me seems like asking for a lot
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Katelyn Andrews
Real Estate Agent · Middle Georgia · Member since 2020 · 54 posts · 32 votes
4y
@Michael Conte our market is a lower income market. Average rent in our for a 3bd/2bth house is $875-950.Houses are proportionally cheaper (although that is quickly changing in this current market).
I would agree that seems like a lot. I know people in my market wouldn’t be able to afford that at all. I would see what your market can bare.
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Nicole C.
OP
Accountant · Los Angeles, CA · Member since 2020 · 8 posts · 1 vote
4y
Thank you for everyone for your advice and responses. Sorry I wasn't clear on this, I asked for first month's rent and last month as a security deposit. $5200 in total. I then charged a late fee of $100. I did not ask for a separate deposit. She is short of $1100 of the $5,200.
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Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
4y
Quote from @Nicole C.:

Thank you for everyone for your advice and responses. Sorry I wasn't clear on this, I asked for first month's rent and last month as a security deposit. $5200 in total. I then charged a late fee of $100. I did not ask for a separate deposit. She is short of $1100 of the $5,200.
I agree with some of the other posts, asking what was the screening? When I had trouble with my tenant paying I reached out to local property management companies. They had great advice and helped me get all the money back.
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
4y
@Nicole C.
So, why did you let her move in without paying everything upfront?
Send an eviction notice to "start the clock" and avoid excuses.
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Josef Hardi
Investor · Member since 2021 · 73 posts · 48 votes
4y
Hi Nicole,
A couple of questions for you:
1. Is your rental property located in the city of Los Angeles or in the county of Los Angeles? You would have more protection in the county of Los Angeles.
2. I think it's best you consult to an eviction lawyer to know what options you might have. Because it's harder to evict tenants who have been late on rent. The local government offers higher protection to tenants who cannot pay, more than those who are able to pay rent on time.

Worst scenario would be for the tenant to state to you: they cannot pay due to COVID (no certification is needed). And if they state that, you cannot evict them or demand rent until 2023. Please contact an eviction lawyer as soon as possible, and try to work with the tenant so they do not miss their payment.
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