The profits you make with your rental properties are highly dependent upon your tenants paying their rental payments each and every month. Without these payments, you will lose money, and this is never a good thing for a landlord. Creating good and effective eviction policies can help you when you have tenants who are not paying, and here are some tips that may help you decrease the amount of money you lose due to bad tenants.
Find Good Tenants
The best way to prevent a loss of money and having to evict tenants is by selecting good ones. This, however, is easier said than done. To choose good tenants, you may need to go through a variety of different steps to make sure the people you choose will pay their rent each month. A good way to do this is by running background checks on each applicant. You may also want to run employment verification and other types of checks so you can find out exactly who these people are. This may reduce the problems you have with bad tenants, or it may even eliminate the problem completely.
Use Strict Eviction Policies
Another good strategy is to develop strict eviction policies. By doing this, your tenants will know what you expect of them and what you will not tolerate. You should include these policies in the lease and discuss them with each new tenant that moves into one of your units.
One good policy to have is that you will begin the eviction process as soon as a tenant is 10 to 15 days past due on his or her rent. You could also charge a late fee for any rental payments made after a certain date of the month. These are just a couple rules you could develop, but you could have others too.
Enforce The Policies
The key with these rules is that you must be willing to enforce them with every tenant you have. If you let the rules slide with a tenant, he or she may not worry about being evicted, and this tenant might continue paying his or her rent late each month. Enforcing these policies is not an easy task for some landlords, and it might be hard for you if you are gentle and soft mannered; however, it is important for you to do this.
A good place to start when a tenant is late on rent is by sending a letter to the tenant as a simple reminder. In the letter, you should state the amount of the late fee that should be paid when the rent is paid. If you do not hear back within a couple days, you could then call the tenant to remind him. At that point, you will probably know if the tenant has the money and will pay you or not.
If the tenant appears to not have a way to pay the rent and does not have a good excuse for it, you may want to pursue evicting him or her. The evictions process is one that is different in all states, but it must be followed step by step according to the state you live in. It can cost money to evict a person and it can take time. It does not happen overnight.
Use An Alternative Method
There are alternative methods you can use to persuade a tenant to move out willingly, and one of these is called cash for keys. With this method, you will actually pay the tenant to move out. This may seem counterproductive; however, it can work. If this tenant continues to skip rent payments, you could lose out on a lot of money. By paying the tenant to move out, you could actually reduce the amount of your loss. In addition, it could help you avoid going through the formal evictions process.
Managing rental properties can be a tough job, and one of the tasks that can be the hardest is evicting a person. If you need any assistance with this, you could hire a company that specializes in tenant services, and they could do the work for you.