When to decide to get rid of the tenant

If the tenant is still in the home, you have a big decision to make and it goes like this . . . the tenant has already trashed the house . . . it is hard for them to trash it anymore . . . is it worth just letting them stay as long as they pay the rent and push the huge expense of turning the home off until they leave?

OR, the alternative decision is to get them the heck out and pursue someone who is going to take care of the home AND pay the rent on time.

I find it hard to give you advice on which one you should choose. Like any person giving good advice, the answer is really, “It depends.” Here are some questions I would ask myself . . .

• Are they current on rent or do I have to spend a lot of my time collecting from them?
• Is the house just not tidy (i.e. underwear on the ground), is it dirty (i.e. dishes left in the kitchen sink and roaches everywhere), or are they not taking care of the home period (grown up yard, disgusting mildew in the bath)?
• What is your current cash flow situation?
• How easy will it be to get them out if you decide to go that route?

In my opinion, if you can handle the cash flow, I would pursue getting them out if they are “dirty” and of course if they aren’t taking care of the home.

It has been our experience that this is usually a symptom of a bigger issue that manifests itself in more work orders and more collections. People who don’t have it together in their housekeeping skills, typically don’t have it together in a bunch of other areas of their life.

In this scenario, I highly suggest attempting to serve them a 30 day notice (provided the lease is over) or asking them if they would terminate the lease prior to the end. To do this second part, I would offer them some sort of benefit to leaving early . . . perhaps giving them one month rent free or telling them you won’t pursue them for the damages they have already accrued or even offering to pay their moving expenses.

Bottom line is you don’t want to have to spend the money to evict them.

Once the tenant is out

So at this point you’ve either gotten the tenant out or you just found your house in a less than desirable state. What do you do now?

1. Take a bunch of pictures. As if you didn’t know this already, taking pictures for the future pursuit of getting the tenant to pay you for all this mess is highly important. If you end up in front of a judge, pictures are a hard thing for the tenant to argue against. Also, have them timestamped so the tenant can’t say that happened AFTER they left. It may even be worth a video just to make sure you don’t miss anything.

2. Get estimates. Even if you do the work yourself, hammering each nail, it is wise to get some 3rd party estimates. You can charge out the security deposit and pursue damages based on a reasonable 3rd party estimate even if you do the work yourself.

3. Complete the work. The last thing you want to do is waste time on getting the work done. Getting the home cleaned up and back out on the market will limit the dollars you lose.

4. Make sure you send the tenant a full accounting of their security deposit (itemized) on time and in accordance with the 

North Carolina’s Residential Rental Agreement Act

. Currently, you must do this within 60 days from them moving out. The last thing you want to do is miss this deadline and have the tenant counter sue you and WIN!

5. If the tenant communicates with you, GREAT! Usually the ones who communicate are pretty upset. But, keep in mind, these are the payers, so take your time and walk through it with them step by step. It really isn’t fair if they are confused and just looking for clarification and you don’t spend the time with them to get them the clarity they need to feel comfortable with your accounting. We’ve even found that we were wrong on charging them certain items and after they cleared it up, we got a big fat check.

6. If the tenant doesn’t communicate, pursue collections immediately. I’ve heard a bunch of collection people say that time is the most important factor in getting money over not getting money. We give our tenants 14 days to respond and if we don’t hear from them, we either file suit against them or send them to collections.

7. When to file suit versus send to collections. This is a question we get often. Filing suit is simply filing a lawsuit in court, getting a judgement and then filing a wage garnishment. Collections for us is sending the tenant to a collection agent. We draw the line on where to send it based on the tenant’s income. If the tenant makes less than $30,000 per year, we suggest sending them to collections. There is a minimum amount of money the courts will allow a tenant to make before they will garnish their wages and that $30,000 mark for us tends to be a good breaking point.

Now let’s take a look at a couple of things you should NOT do:

1. Start educating the tenant on housekeeping skills. Truth is they don’t care and even if you change them for a time being, they will always be lazy and you will be educating them again in a few months. We had a manager attempt to do this on one of his houses and the tenant’s response was, “You live how you live and I’ll live how I’ll live.”

2. Get mad. As hard as it is, it does you no good to get mad at the tenants. In fact, it may make you do something that you will regret and completely screw up your future pursuits of them. It is hard to get a judge to feel sorry for you when you got mad and took the front door off of the hinges and threatened to beat them up in the alley.

Just like pursuing a tenant for money, if you are in landlording long enough, you will run into some tenants with pretty bad housekeeping skills.

It really makes you want to figure out a way to see their housekeeping skills prior to renting to them. We’ve actually tried to do this with no avail.

The best thing to do is to treat this like a business and make objective money-making decisions that are in your best interest in the long run.

Have you ever had a house trashed from a tenant? If so, what did you do about it?