Cleanouts after evictions are killing us. Cash for keys, or something else?

Question

We self-manage about 140 units in southwestern PA, mostly older single-family homes and small multifamily, with a two-person maintenance crew. Cleanout costs went from about $1,200 in September to about $3,400 in just the first 12 days of November. Nearly all of it came from three move-outs:

• Two evictions. These were the biggest jobs, $1,000 and $1,500, including one that took three days.
• One tenant who fell behind before leaving. By move-out the security deposit had already gone to back rent, so nothing was left to cover the cleanout.

Two evictions. These were the biggest jobs, $1,000 and $1,500, including one that took three days.

One tenant who fell behind before leaving. By move-out the security deposit had already gone to back rent, so nothing was left to cover the cleanout.

The pattern is the same each time. The tenants who leave the biggest mess are the ones who already owe us money, so we can’t recover any of it.

What I’d like to know:

• Cash for keys. Do you offer it, and when? How much (a flat amount, or part of the deposit back), and what conditions (out by a date, broom-clean, keys returned, walkthrough passed)? Does it actually cost less than finishing the eviction and paying for the trash-out?
• Timing. At what point do you stop working with a late tenant and file? Do you have a hard rule, such as filing on a set day of the month? We're instituting some more firm rules here and would love to hear what everyone else is doing that works.
• Protecting the deposit. How do you stop the deposit from being used up as unpaid rent before move-out? Do you refuse to apply it to rent, collect a larger deposit for weaker applicants, or require last month’s rent up front?
• Trash-out pricing. For an eviction cleanout of a 2–3 bedroom house in a similar market, what do you pay? Flat rate, by the truckload, or a dumpster plus your own crew?
• Collecting afterward. Do you bother pursuing judgments for cleanout and damage after an eviction, and has it ever paid off?

Cash for keys. Do you offer it, and when? How much (a flat amount, or part of the deposit back), and what conditions (out by a date, broom-clean, keys returned, walkthrough passed)? Does it actually cost less than finishing the eviction and paying for the trash-out?

Timing. At what point do you stop working with a late tenant and file? Do you have a hard rule, such as filing on a set day of the month? We're instituting some more firm rules here and would love to hear what everyone else is doing that works.

Protecting the deposit. How do you stop the deposit from being used up as unpaid rent before move-out? Do you refuse to apply it to rent, collect a larger deposit for weaker applicants, or require last month’s rent up front?

Trash-out pricing. For an eviction cleanout of a 2–3 bedroom house in a similar market, what do you pay? Flat rate, by the truckload, or a dumpster plus your own crew?

Collecting afterward. Do you bother pursuing judgments for cleanout and damage after an eviction, and has it ever paid off?

Real numbers and real policies would help most. Thanks.

Harrison C. · Answer

Karolina, Chris and Ametria covered the offer and the judgment side well. Two things I'd add that make cash for keys cheaper and the cleanout smaller.

Put the offer on a sliding date in writing. Something like the full amount if they're out, broom clean and keys back by the 5th, less by the 10th, nothing after that and the filing goes ahead. A single number with no clock gets negotiated; a number that shrinks every few days gets people packing. Pay it at the walkthrough, never before, the way Chris said.

Price the offer against days, not against the trash-out alone. Every day the unit sits through a filing is a day of rent you will not see, plus the cleanout, plus the turn after it. When you add those up for a 2 to 3 bedroom, an offer that looks generous usually comes in under the cost of finishing the case.

On the size of the cleanout: the mess is usually visible weeks before move-out. When a tenant first goes 30 days behind, a routine notice of entry for a filter change or smoke detector check tells you how full the house is, and that is the moment to make the offer, while there is still something to trade.

And on the deposit: dated move-in photos of every room, signed by the tenant, are what make any later claim for cleanout and damage hold up, whether you chase the judgment or not.

Rachel Mazzanti · Answer

The cash-for-keys number only means something if every eviction gets costed the same way in the books. One line per unit: lost rent from the first missed payment to the next lease, court and constable fees, the cleanout, and the turn after it. That total is what an offer gets priced against, and it is usually bigger than the trash-out alone, which is why an offer that looks generous often still wins.

Two bookkeeping habits that pay for themselves here. First, the deposit is a liability, not a pot to spend. Once it gets eaten by back rent there is nothing left for the cleanout, so last month's rent collected up front protects it better than a bigger deposit does. Second, unpaid rent is not a deduction. It was never income, so it does not lower the tax bill. The cleanout, the turn, and the court fees are the deductible part. And if you get a judgment, book it as a receivable and write it off when you stop chasing, instead of leaving it floating in the books forever.

Theresa Harris · Answer

I'd look at the average cost per unit, not monthly cost as it will vary depending on the number of units and units themselves. $1500 if it took 3 days to do turnover, isn't that bad as the place likely needed a lot of work. The last turnover I had required repainting in quite a few rooms and new carpet in one area and that bill came to $1500 (with me doing some of the painting to keep costs from the PM down).

As to when to start dealing with late rent, as soon as the person is late. I think in some of the states that is the 5th of the month (where I am rent is due on the 1st, it is late on the 2nd). I do work with some tenants if they give me notice, but only as a one off. I won't do it regularly (though for one, they paid twice a month as it was easier for them as they got paid twice a month).

Theresa Harris · Answer

I'd look at the average cost per unit, not monthly cost as it will vary depending on the number of units and units themselves. $1500 if it took 3 days to do turnover, isn't that bad as the place likely needed a lot of work. The last turnover I had required repainting in quite a few rooms and new carpet in one area and that bill came to $1500 (with me doing some of the painting to keep costs from the PM down).

As to when to start dealing with late rent, as soon as the person is late. I think in some of the states that is the 5th of the month (where I am rent is due on the 1st, it is late on the 2nd). I do work with some tenants if they give me notice, but only as a one off. I won't do it regularly (though for one, they paid twice a month as it was easier for them as they got paid twice a month).

JD Martin · Answer

To answer your questions,

• Never. I'd burn the house down first. I like to think I'm pragmatic but there are a couple of hills I'm willing to die on and that's one of them.
• We post pay or quit notices on the 3rd of the month, regardless of when the tenant says they will have it paid. There's no point in not getting the clock started. We could actually do it on the 2nd but we essentially give them one extra day to get it in gear. In all my years doing this I've had to post twice. Neither resulted in eventual eviction.
• Start the eviction process immediately (see above). Depends on your state but where I am we can get someone gone before 30 has even gone by, and we are permitted to use deposits to cover unpaid rent. That and the tenant's knowledge that once they have an actual court judgement against them, good luck ever renting anywhere again, usually does the trick.
• Have never had an eviction (knock on wood!) over hundreds of tenants, but have had to do plenty of cleanup from voluntary move outs of slobs. Generally try to avoid roll offs these days as they're crazy expensive any more, so it's usually try to haul to the curb whatever the city will pick up - surprisingly most things, including dressers, beds, appliances, etc - and pickup load to the dump whatever's left from maintenance.
• Again, no evictions, but a few instances where deposits didn't cover everything. Never bothered pursuing as you can't get blood from rocks and in that situation I'm more pragmatic than principled - my goal is always get the unit back as empty and damage-free as possible.

Never. I'd burn the house down first. I like to think I'm pragmatic but there are a couple of hills I'm willing to die on and that's one of them.

We post pay or quit notices on the 3rd of the month, regardless of when the tenant says they will have it paid. There's no point in not getting the clock started. We could actually do it on the 2nd but we essentially give them one extra day to get it in gear. In all my years doing this I've had to post twice. Neither resulted in eventual eviction.

Start the eviction process immediately (see above). Depends on your state but where I am we can get someone gone before 30 has even gone by, and we are permitted to use deposits to cover unpaid rent. That and the tenant's knowledge that once they have an actual court judgement against them, good luck ever renting anywhere again, usually does the trick.

Have never had an eviction (knock on wood!) over hundreds of tenants, but have had to do plenty of cleanup from voluntary move outs of slobs. Generally try to avoid roll offs these days as they're crazy expensive any more, so it's usually try to haul to the curb whatever the city will pick up - surprisingly most things, including dressers, beds, appliances, etc - and pickup load to the dump whatever's left from maintenance.

Again, no evictions, but a few instances where deposits didn't cover everything. Never bothered pursuing as you can't get blood from rocks and in that situation I'm more pragmatic than principled - my goal is always get the unit back as empty and damage-free as possible.

John Racine · Answer

Karolina, one data point on judgments, since Richard's experience and mine went opposite ways.

When I owned long-term rentals in Orlando, I filed my own evictions with no attorney or service, and under Florida's process I could usually get a tenant fully out in about 25 days. That meant roughly a one-month rent hit. Joe's point that PA moves even faster on notice means your real cost is mostly the cleanout and the turn, not the court time.

The judgments I got in Florida were over bounced move-in checks, not cleanouts, and I never recovered a cent on them. I didn't renew them or run asset searches the way Richard describes, so his approach may be the difference. But if you're not going to do that follow-through, I'd treat the judgment as a record for the next landlord, not a recovery plan.

Rosina Persaud · Answer

Karolina, with about 140 units, this is a turnover problem, not a cleanout problem. Price the two paths in full: a cleanout at $1,000 to $1,500 plus three days, against a month of vacancy while a unit sits. Vacancy costs more than the repair, so the faster path usually wins. We run rent-ready turnovers on a 21-day schedule, and we would rather pay for a cleanout and get the house moving than let it sit while we argue over a few hundred dollars. On the front end, tighten screening — verified repeatable income, and the story has to match the paperwork — because that is what cuts the next eviction. On the back end, keep one vendor you have tested in small paid steps, with flat pricing, so a cleanout is a phone call, not a project. How many days, on average, is a unit sitting empty after an eviction right now?

Joe Waltman · Answer

Karolina, two Pennsylvania points that change the math. First, the notice to quit for nonpayment in PA is 10 days, so you don’t have to wait a month to file. Pick a fixed day after rent is due and file every time. Second, PA has a hold period for belongings left after an eviction, so schedule the trash-out crew for after it ends instead of paying for two trips.

For the cash-for-keys amount, use your own numbers. For each of those three move-outs, add the rent lost from first missed payment to the next lease, court and constable fees, and the cleanout. Any offer below that total is a win, and it shrinks every week you wait, which is why Harrison’s sliding offer works.

I own a 5-unit and a rental house, and I’m building a free cash-for-keys break-even sheet from exactly this math. Reply if you would like it.

Richard F. · Answer

As with most issues, it all starts with the screening process for every adult, and proper prep of the rental with long term durability rather than cost as the driving factor. And of course, following your processes.

Never offered cash for keys, but times are clearly changing as are the laws around squatters and tenants in general, so I view it as a last resort.

Many states do not allow the use of SD for past due rent, so that may be a factor in your current process. For the states I have operated in, the tenant had a full 30 days, with specific, properly timed notices, before an eviction could be actually filed. Therefore, you start that process on Day 1 that they are late, and follow through without accepting partial payments until/unless you have verified their current financial situation and determined they actually have the capability to catch up within 60 - 90 days Max.

Trash-out is skutwork labor...for an operation your size you should have a very large box truck with a Tommy-lift that your 2 man crew can fill with multiple cleanouts before heading to the landfill. And, refer to point 1 above. Screen much better, and follow up with a routine critical annual inspection, addressing housekeeping; evidence based number of occupants; and obtaining updated financial basics along with tenant interview. It is less costly to start moving tenants with Bad Habits out today, than it will be tomorrow.

Pursuing judgments depends on the age and long term real world expectations of the deadbeat. For someone in later life that has nothing to show, no prospects, no ambition, and lots of Bad Habits, not worth the effort. For a younger person, even a Bad Actor, there is time and life for them to change their ways. They may get married and start a family, then they need a home or nice car. If you have a judgment against them, and renew it every X number of years per local laws, you can (and I have) receive a check one day, if you have an attorney that will perform an asset search annually, or turn the judgment over to a collection agency. Just be sure whoever is following up has your current contact info. Never count on collecting, but it makes for a nice surprise when it does occur. In the meantime you at least have taken the necessary steps to ensure LL's in the future are duly warned.

Chris Seveney · Answer

We offer cash for keys. To answer your question, it depends. We've done anywhere from $500 to $5,000. Also, as part of the requirement, all materials must be removed from the property and be left in broom-up condition. We did have one tenant throw everything in the yard, thinking that was good because it said the house needed to be swept.

From a timing perspective, we try and work with them immediately on it when they get in trouble, but never give any money until after they are out. In regards to protecting the deposit, that's a tough one because there's a lot of legal issues going on. Lastly, in most instances, no, we do not pursue the judgment because you are throwing good money after bad.

Cleanouts after evictions are killing us. Cash for keys, or something else?

Cleanouts after evictions are killing us. Cash for keys, or something else?

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