Sunday, 19 January 2014
Expediting Bad Tenants
Cash for keys program
Your rent is overdue for several months . The tenants are impossible to get a hold of. Anytime you do speak with a tenant they have a new tragic story to share. What could have gone wrong you wonder ? Everything started out well , they gave first and last months rent. But then they were a bit late with the rent. And you thought I could wait a bit. Rent arrives some time next month then they couldn’t pay all of it. “ Money should be coming soon” they proclaim , if you could just wait a bit . This is the property owners nightmare. You have got a bad tenant and it’s time to deal with it!
Maybe you feel bad for their predicament and maybe it’s even legitimate . But your bank or mortgage company doesn’t accept stories and neither should you. Now is the time to take action . There could be a solution but it might make you angry . So I need you to keep an open mind. I would like to introduce the cash for keys program. If you want your delinquent tenants out suggest this to them. Your conversation could go like this “ hey John Tenant, I Know you and the family have had it hard lately . I have a solution for both of us “ . Offer to give them $600 cash to use towards your next apartment . Let them know you will forgive whatever is owed and the only catch is you need to be out by the first of next month. Not only that, I need this place vacant and broom swept before I hand over the keys.
Ok, property owners I told you you might get angry . I would like you to consider how much your current tenants have already cost you. No rent for the mortgage or property taxes , if you pay utilities then this too costs you. Not to mention sleep and your peace of mind. If these habitually late renters look like they are about to move, fantastic! If not they could go on for months while your savings dwindle away. If our Canadian government has a resettlement plan to get rid of undesirables why can’t we . The premise behind it, pay a little save a lot .
Expect the tenants to be skeptical . This might feel like a trick . Assure them you have amicable goals. Tell them you will have your lawyer draw up an agreement stating in exchange for vacating the property by the end of the month , you will provide x amount of dollars to get them on there feet. This might feel like the answer they were looking for . A fresh start for them and you can begin to get the unit rented out . This time to the right people .
Of course our goal as property owners/ managers is to avoid being put in this situation altogether . Good tenant screening and prompt reaction to non-compliances will help teach your renters what you expect of them . If you still have your doubts, having an experienced property manager minding your rentals makes sense. Knowing the laws and regulations keep you on top of things .
Glenn Brown is owner of My Rental Unit property management and has enjoyed success with multiple unit investing.