I recently got an email from a newer investor I was helping out. He’d already done several deals and was very successful despite being in the real estate business for such a short period of time. However, he now had a tenant in one of his rental properties who was not paying rent, and since he’d never been in this situation he didn’t know the best way to handle it.
Well, the best way to handle a delinquent tenant is to always try and contact the tenant and try to get your rent. If you’re able to get a hold of the tenant and they can’t pay rent then you need to talk them into leaving the house ASAP. Over the years I’ve had a few tenants in this position and my proposal has always been “If you leave the house within two weeks in broom clean condition then I won’t come after you for the past rent you owe.”
Thankfully, this has always worked for me and I’ve never had to do an eviction in my life. However, oftentimes when I tenant stops paying rent they “put their head in the sand” and they’re not going to take your phone calls or answer your emails. If this happens you need to begin the eviction process and in most states the first step is to mail the tenants a Pay Rent or Quit Notice.
Download Your FREE Tenant Screening Guide!
Hey there! Screening tenants can be a tricky business, and this critical step can be the difference between profits and disaster. To help you with your real estate investing journey, feel free to download BiggerPockets’ complimentary Tenant Screening Guide and get the information you need to find great tenants.
The Pay Rent or Quit Notice
This notice says that the tenant owes X amount of dollars in rent and they have a certain amount of time to pay this money or they’re going to get evicted. In Virginia where I live, it’s a 5-day Pay Rent or Quit Notice, but each state is different and some states are as low as three days.
What I like to do with this is mail one to the tenant but I also have someone go over to the house and tape one on the front door for me. In the few instances where I have had to use this I always get the tenant calling me within a day. There’s something about this piece of paper that scares them straight!
And like I mentioned earlier, I’ve never had to do an eviction in my life. Plus, if your tenant does call after they get the notice and that’s the first time you’ve talked to them, here’s your chance to try and get them out of the house voluntarily without having to do through the eviction process.
But what happens if the tenant doesn’t contact you after you’ve mailed and taped the notice to their front door?
Then you need to immediately continue with the eviction process. Head down to your local courthouse and find out what forms you need to fill out to get the process moving along.
The worst thing you can do (that far too many investors are guilty of) is not take immediate action to get them out of your house. Do not hold out hope that they’re eventually going to call you and magically come up with the rent. If they’ve ignored your phone calls, emails and your Pay Rent or Quit Notice, then you’re never going to hear from them and you need to put the legal system to work.