EVICTION 101

EVICTION 101

 It’s that time of the month.. and by  this I mean its Oct 2nd, which is 1 day after the 1st, which is the day rent is due from all of our tenants.  Despite the on-line rent payment system making it super easy and fast for tenants to pay, and despite giving them multiple options to pay they STILL find a way not to pay on time or to only make a partial payment.  What do you do when this occurs?

 An experienced landlord once told me that you haven’t been a landlord long enough until you have a tenant horror story.  Well I have mine. And I learned A LOT from it. So I thought I would share some tips with you to avoid your horror story if you haven’t had it yet:

 TIPS TO AVOID YOUR HORROR STORY:

 1.      NEVER rent to family and NEVER rent to friends:  In general you should never mix business with pleasure it just creates a bad situation all around.  Treat your business like a business. This is hard to do if someone you love is renting from you and behind on rent.

 2.      BE CLEAR FROM THE BEGINNING: I tell all tenants that they are expected to call me if something comes up and their rent will not be paid on time.  I also tell them that we don’t like to listen to stories and excuses.  Tell me why you can’t pay and tell me when you will pay.  There is no longer a grace period in our lease since we implemented the on-line rent payment system and all late fees have gone up substantially.  Tenants are made aware of all this BEFORE they sign a lease.

 3.      SET UP A PAYMENT SYSTEM AND STICK TO IT: If you like mail, then tenants mail their rent. If you do on-line then they have to go on-line. What is my point? DON’T CHASE RENT! You own a business! You don’t have a JOB! Being a landlord is about setting yourself up for freedom! I don’t chase rent. I won’t pick it up from tenants, I don’t allow them to pay in an alternative way. I set up a payment system and I stick to it. Every time you bend and fold to a tenant they will expect it over and over until they are walking all over you. Set your boundaries. You are not their errand boy.

 4.      GOOD COP/BAD COP: You should always have a business partner that balances your qualities. In this situation, with an eviction, you should definitely let the Bad Cop take care of things.  The Good Cop is nice at keeping balance and peace and I recommend that the Bad Cop always run their plan by the Good Cop before making any irrational decisions. The problem with the Good Cop is simple: They are too nice! They will fall for every doe eyed excuse in the book. They will believe the “sorry.. I forgot.. I will have it tomorrow” excuse.. only tomorrow never comes! I have had tenants play this game because they know from prior experience it will delay you filing for eviction so they can live for free longer!  If you are the Good Cop.. get yourself a bad cop! Do you have a business partner everyone thinks is an asshole, or a bitch, or mean? THEY should be handling rent collection and evictions.

 5.      SEPARATE BUSINESS FROM PERSONAL:  You will hear every sob story in the book about why rent is late or why a tenant can only pay partial rent.  Be sympathetic but understand business is business and personal is personal. Don’t get involved in your tenants lives.  Soon you will find that you are fed endless excuses month after month.  The bottom line is – if a tenant can’t afford to live in your building or home then they need to find a more affordable place to live. I am the bad cop in our business. I always say: “ I’m sorry that is happening to you but you have to understand that I run a business and you need to pay your rent so I can pay my bills. So by not paying your rent you are asking me to pay it for you. Which I simply cannot do.”  Tenants don’t like me. I don’t care. I’m here to run a business. If they want to like someone they have to go talk to Good Cop and like him.

 6.      UNDERSTAND THAT THINGS HAPPEN:  You can have the best tenant in the world that keep s your property in amazing condition and pays on time – and then something catastrophic happens in their life and they don’t have the rent.  Stuff happens! To all of us! Work with them if you can, but don’t get involved in their problems. Again, sympathetic, but keep business..business. Set up a payment plan with them to get them caught up.  Ask them how soon they will be able to pay.  It’s when this becomes a recurring theme with a tenant that you need to be on top of things in a less understanding fashion. This is where Bad Cop comes in.

 7.      START EVICITON IMMEDIATELY AND DON’T STOP:  As you become an experienced landlord you will come to find that a small fraction of your tenants cause all the trouble. These are the few tenants that are ALWAYS late with their rent, or ALWAYS have an excuse for not paying.  It will be the same few over and over again.  I have stopped listening to endless excuses from the same few and I immediately start the eviction process.  If rent is not in on the 1st or a partial payment is made I will call them and let them know the rest is due by midnight or I am starting the eviction.  FOLLOW THROUGH when you do this. Post a notice on their door, start the process. If rent is paid in full the process can always be stopped.

 8.      LAY IT ALL OUT IN THE LEASE:  Our lease is 12 pages long and growing.  For the sake of this blog we won’t go into detail about leases. But in reference to evictions – we have in our lease that the tenant waives their right to the notice to quit.  This way the eviction process can be started immediately. 

 9.      TIME IS CRITICAL:  The longer a tenant is in your apartment not paying, the more money you are losing. Rapidly! Time is critical when evicting. Keep track off all your deadlines, file appropriate paperwork, etc.  I’ve already been halfway through the eviction process and had a tenant call me and tell me they were “paying the rent on Monday”  so I didn’t follow through on the next step in the eviction and guess what?? The rent NEVER came! They were just stalling so they could stay in the property longer. So NO MATTER WHAT the tenant says – keep following through with the entire process until the check is cleared and in your account!!!  The eviction process DOES NOT take that long. It does take forever for landlords that don’t follow through,  aren’t on top of their timelines, and don’t have their paperwork together.

 10.  KEEP COPIES OF EVERYTHING: Keep copies of all emails that are exchanged between you and the tenant, all texts that are exchanged. Keep notes and a timeline of all late rent payments, all unpaid bills etc.  When you go in front of a judge to have them evicted they want to see that you have tried to work with the tenant and they want to see that you have all your ducks in a row. DOCUMENT EVERYTHING!!! Even if its on a piece of scratch paper. Write it down and put it in a file for that tenant or property.

 11.  STAY CALM: Last but certainly not least. This is easier for Good Cop to do then Bad Cop. Bad Cop typically lacks patience.  No matter what a tenant slings at you.. don’t respond.  KEEP IT ALL BUSINESS!! Trust me – this is hard to do when you are Bad Cop.  Post your eviction notice. Send informative emails.  No need to get personal or nasty no matter how frustrated you are. There is nothing you can do about it except follow through with the legal process and get them out as quickly as possible.

 Hopefully these tips will help to minimize your 1st horror story. If you are currently a landlord, please feel free to leave your tips and advice in the comments below! We would love to hear from you and I’m sure there are endless amounts of advice we could give to each other. Every time I talk to other landlords I get great tips on how to make my business better!  Keep in touch with us via Twitter, Facebook and our website for great tips on everything Real Estate!

 

 

About April Crossley

April Crossley is the current owner of Crossley Properties, LLC, a real estate investment company located in Reading, PA. Over the past several years Crossley Properties has been buying income properties all over Berks County, PA and surrounding areas. April continues to grow the rental portfolio of Crossley Properties, LLC while simultaneously helping others increase their net worth with great rates of return on secure investments.

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