Evict tenant, or try and settle?

[snowbank]

Tenant wants to break lease early. One of the roomates moved out and they say they can't pay anymore. They have 5 months left on their 1 year lease. Should I try to take them to court/settle for something(when they probably don't have anything they can pay) or should I evict them now(currently late on rent) but they usually pay a few days late, but evicting them now basically means I give up the one month rent that are intending to pay, just to get them out asap so I can try and get new tenants in. In that case I think I'd give up the right to go after them for the rest though since I'd be the one kicking them out. But like I said, if I did go after them I don't know how likely it is I'd be able to get anything. The person who's going to re-rent it out for me suggested I evict them for those reasons when I spoke to them today.

Any advice?

 

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[Runum]

If you're going to lose them I would get them out ASAP as peacefully as possible. IMHO you are prolonging the inevitable if you delay. If you can get a new tenant in now you are covered through the upcoming holidays. If you let him hang around he will be there until after Jan.1. Good luck.

 

[snowbank]

If you're going to lose them I would get them out ASAP as peacefully as possible. IMHO you are prolonging the inevitable if you delay. If you can get a new tenant in now you are covered through the upcoming holidays. If you let him hang around he will be there until after Jan.1. Good luck.

The thing is they are trying to pay me for this month though. So I'd be paid for the month. Thing is, because it's late I have the option of declining it without late fees I think.

I think I forgot to mention they intend to leave at the end of this month.

 

[Runum]

They are going to pay the FULL rent for the month, not just their half?

 

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[PurEnergy]

I would take the rent and start advertising for another tenant. This way you might not miss a beat. Start eviction as early as possible next month if the rent is not paid. If they want to stay this month there's not much you can do about it whether you have the rent in your pocket or not. Collecting on the judgment is a bird in the bush vs rent in your hand.

My .02

 

[BryanC]

I would just do as Runum has suggested and runum at of there as soon as possible. Peacefully... but with money in hand. If they are borrowing your property, you are definitely entitled to fair and reasonable compensation.

/end attorney bryan's rant.

P.S. - Can somebody elaborate on any back up strategy that can be implemented if this situation would happen to come up on me if say I purchased a rental property. Is there any form of insurance against such loss? In my opinion, even though I have not completed such a deal, it seems like the renter is the back bone of a whole operation ... if they default what are the options?? Especially if you have mortgage payments that need to be paid, taxes, home owner's insurance, etc. etc. What happens if say you missed one of those mortgage payments because the renter would not pay. It seems as long as the money is coming in, but what can you do to have two ends meet if such a scenario arises. I ask this cause I definitely want to be in RE eventually. Still working on part one of my formula, building a business.

P.P.S. - Good thread.

 

[Runum]

BryanC the bank doesn't care whether the renter pays or not. The only thing that matters is that YOU pay. The only insurance that I know of against loss of rents is a cash cushion. That's why you do you DD and don't buy negative CF properties.

 

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[BryanC]

Okay, sounds like I need a 6-12 month rental cushion? Would you say that is a reasonable insurance policy against such a risk... Also, is that the worst thing about Real Estate? Dealing with the tenant? That would really be the only problem I can see... is every other risk like fire, hurricane, and natural disasters covered by the home owner's insurance?

It seems like everything boils down to dealing with people. Maybe the right insurance policy is to have the right people. Maybe even seek a good tenant before seeking a out a rental property. Am I venturing on the right path... seek a tenant before anything else. Then fill that need! Maybe I am supposed to be interviewing people and analyzing their needs more than anything else.

Sorry for all the questions. Just I am pretty much sold on Cashflow investments at this point... I have analyzed all the rewards of first building a business for cash flow and then investing that cash flow into RE. Now I am ready to analyze the risks and down sides of both so I can do this with as little resistance as possible...

I am pretty certain I can make all of this happen. I have actually always sought Cashflow, just I never realized how powerful it was. When I setup my first Vending machine and saw a quarter go in to it, I saw great potential. Now I am ready to get into the bigger parts. First I need to understand the fundamentals and I believe I can make all of this happen.

Thanks!

 

[NoMoneyDown]

Maybe the right insurance policy is to have the right people.

Bingo! Many times landlords - especially new ones - opt for the first tenant with a SD and 1st month's rent in their hand. You have to screen carefully - VERY carefully - as the mistake you make today could cost dearly later. But even if you screen carefully, there is sometimes no way of avoiding a bad tenant later. Divorce, job loss, etc., can almost never be known beforehand. Just do the absolute best that you can.

Sometimes landlords - again, usually new ones - opt instead for a PM company to do all the "dirty" work of leasing, evictions, etc., but I've found that often times they are WORSE than many of the tenants! So, screen PM companies even MORE carefully (if you plan to use one).

But, you're about right that tenants are usually the worst of your problems. Sure, you'll have maintenance issues you'll have to deal with, too, but have some people lined up whom you can trust to deal with those. Often times, it may even be something simple that you can do yourself (e.g., replace a garbage disposal, if your somewhat handy).

 

[CVentures1B12]

Sorry to hear about your predicament and even though I have no experience, from reading, researching, and mostly listening to what everyone on here suggests about this thing; I think that maybe you should get them out while you can. Take it with a grain of salt, but you will get some money for the rent, you can get a better tenant in there, and you will not have to pay expensive court costs to get little to nothing from them.

Also, I would not get too upset, just make sure to learn from the experience and screen the tenants just like you would if they were living with you, because they are, in fact, your lively-hood. Have you ever considered a PM company?

Best,
Josh

 

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[snowbank]

They are going to pay the FULL rent for the month, not just their half?

..

yes

 

[Runum]

..

yes

Then I agree. Take the rent. Get them out when their time is up(3 day notice.....) and get it rented again.

 

[snowbank]

Then I agree. Take the rent. Get them out when their time is up(3 day notice.....) and get it rented again.

what do you mean by 3 day notice? they are intending to leave the house at the end of the month(4 months before their lease is up)

 

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[bflbob]

I'd say to get ahold of your local courthouse.
Ask them what the process and timing is for evictions in your area.

If you can find a valid reason for eviction on 12/31/08, then work backwards.
If they are gone on 12/31/08, then you can drop it.
If not, then you've already given 3-day notice, reserved court date, etc.

But, by taking the month's rental payment, you are probably going to be unable to evict.
The only out is if they violated another term of the lease, such as pets, drugs, etc.

If they've paid their rent, and haven't done anything else against the lease terms, you have no reason to evict.

This is why I like month-to-month rental agreements.
30 days notice, and they are out.

 

[Runum]

what do you mean by 3 day notice? they are intending to leave the house at the end of the month(4 months before their lease is up)

If they leave willingly, that's cool. If you know it's going to be a problem getting them out then the first day after the rent is due you give them the 3 day pay or quit. In our state a landlord can't do anything with the legal system until that is served.

You sound like you have it under control and there should be no problems.

 

[venom]

Hi Snow
I know this is some rehashing but ....

It couldnt hurt to post the 3 day notice and to start the process. Just in case they dont keep their word.
I only say this because evictions are slow. It will take long to evict than the (less than ) 30 days.
You should also check on the condition of the place before they move out. To make sure they havent trashed the place.
Try to get as much information as possible as well. Just in case you decide to file a case against them.
Things like were they work
Family contact #'s
Etc.
Of course we have filed against some of the tenants, but I think I dont think we ever get anything.
Robert
AKA
Spidey

 

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