Not every tenant is perfect. In fact, you’ll very rarely find someone who takes good care of your property and continues to renew their lease agreement year after year. In most cases, these people eventually transition into home ownership or reach a point where they can afford to move up in house. But tenants should be tolerable – meaning they respect your property, follow the rules, and pay on time.
If you’re in the property management game long enough, you’ll eventually encounter a nightmare tenant who doesn’t seem to have any respect or decency. But because the eviction process can be expensive and drawn out, you don’t necessarily want to file for a formal eviction. Instead, it’s in your best interests to quickly, quietly, and legally get rid of them.
Try These 6 Tips and Avoid Eviction
Dealing with problem tenants is probably the single worst factor of being a landlord. It’s time-consuming, expensive, and frustrating. It makes you think you might not be cut out for real estate investing. But don’t let it run you off!
There are legal ways to get rid of bad tenants without going through the eviction process. Hopefully the following tips get you moving in a positive direction:
1. Don’t Sign Bad Tenants
This might sound like obvious advice to a landlord who is currently dealing with a problem tenant, but the best way to get rid of nightmare tenants is to avoid them in the first place. Clearly you can’t do anything about it right now, but you can address your tenant acquisition processes to lower your chances of bringing in another bad tenant in the future.
Start by developing a stricter screening process. Instead of just accepting the first person that agrees to sign the dotted line, do some research on your applicants. This may include running a background check; running a credit check; calling references; calling previous landlords; driving by their current place of residence; and verifying their income with their employer.
2. Improve Your Lease Agreement
Again, there’s nothing you can do about this now, but this is the perfect opportunity to review your lease agreement and make sure it’s as strict and comprehensive as it can be.
Your lease agreement should have very specific language in regards to when rent is due, what the consequences for late payments are, and what responsibilities tenants have for the property itself. If there are any inconsistencies or vague words, you may have trouble pursuing legal action if something serious were to happen.
3. Try to Understand Where They’re Coming From
Don’t immediately jump down a tenant’s throat when they miss a payment or put a hole in the wall. Life happens and accidents are bound to occur. Even if this tenant has a history of doing similar things in the past, attempt to understand where they’re coming from.
A lot of positives can come from sitting down and having a mature, face-to-face conversation. No yelling, no screaming, and no finger-pointing. At worst, no progress is made, and you can continue with some other methods. At best, you show the tenant that you’re willing to work with them, and they improve their actions.
4. Don’t Renew the Lease
If your tenant’s lease is coming to an end soon, the best option you have is to not renew the lease. Make sure you read up on the rules, because in some jurisdictions, you need a reason to do so.
“In most cases, though, you can simply send a polite, professionally written notice explaining that the lease is not renewing,” landlord G. Brian Davis says. “Thank them for their time with you, explain your move-out policies (including a move-out condition inspection), and be sure to emphasize how they can ensure they receive their security deposit back.”
Be sure to provide adequate notice of non-renewal. Depending on where you’re located, this could be 30, 60, or even 90 days.
5. Raise the Rent
Another option is to raise the rent. While you must follow the law, increasing rent from, say $1,500 to $1,800, may be a way to push a tenant out without taking any legal action.
You do have to be careful with this strategy, though. There’s always the chance that you raise the rent and the tenant decides to stay. In this case, your cash flow might improve, but you’re still stuck with a nightmare tenant.
6. Try Cash for Keys
If you have a tenant who won’t pay and won’t leave, you’ve got a big problem. Eviction is the likely outcome, but you can always try one last thing: Cash for Keys.
Cash for Keys is exactly what it sounds like. You offer to give the tenant a certain amount of money – maybe $300 – in exchange for them handing over the keys and leaving. It saves you from having to go through the expensive eviction process and gives them some money (which they may need).
“Yes, Cash for Keys stings your pride. It feels so ‘un-American,’ like the bad guy is getting away with the crime,” real estate investor Brandon Turner admits. “Some landlords flat-out refuse to even consider this idea because it feels so wrong, but remember, Cash for Keys isn’t personal; it’s business!”
Evict When Necessary
Sometimes you have no other choice but to evict a tenant. The key is to make sure that you do have legal grounds to do so. Here are five reasons you can evict a tenant:
- Failure to pay rent
- Habitual late payments
- Excessive property damage
- Illegal use of the property
- Holdover after lease agreement ends
There may be other legal grounds for evicting a tenant, but these are the most common reasons. Whenever possible, you should try to avoid going through this process. If you need guidance on how to proceed, speak with an experienced property management professional.
Green Residential: Professional Property Management
At Green Residential, we offer comprehensive property management services for landlords and real estate investors in and around the Houston area. If you’re looking for help managing your rentals, we would be happy to give you a hand. Please contact us today to learn more about our services.