Archive for Handling Tenants
My first property to get a tenant with a Section 8 HUD voucher
Out of the 38 properties I’ve managed to accumulate in this business, I must say that my favorite is definitely the one that is currently occupied by a tenant with a Section 8 voucher. The rent is always paid on the first of the month via direct deposit into my bank account and I never hear from the tenant except for the one time each month when she calls to see if I recieved her $100 check in the mail. The Department of Housing and Urban Development (HUD) pays her rent, or at least most of it and she is left with a small payment amount of $100 each month to me to cover the rent that the government won’t pay. So far this has worked out very well for me.
About ten months ago, I was approached by a lady named Stephanie who was needing a place to stay and was looking for a 2 bedroom house or apartment for her and her daughter. She currently lived in an apartment in the next town over that was in a bad side of town and was looking for somewhere more safe to move into. I normally have at least one or two properties vacant at any given time and it just happened that I had two available for her to look at. I showed her the first and she told me it would be too far out of town to live and so I took her to the one located right in the middle of town, which she fell in love with immediately. She told me that she had a Section 8 voucher for government assistance and wondered if I would accept her because of it.
Now before this, I had only heard about Section 8 or HUD vouchers or whatever you want to call them just a few times previously and to be honest, I had no clue if I could or if I should accept the voucher. So I told her I would be glad to have her as a tenant if only I knew what was required of me as a Landlord in order to receive Section 8 vouchers. She told me that it’s not too much hassle on my part (and she was right!) and that the property I was showing her was well within HUD’s standards to lease out to her. I agreed to rent the property to her and she made a phone call to her case worker to set up an appointment for us to show him the property.
A few days later, I received a phone call from some lady that works for the government who was calling on behalf of the HUD inspector and she confirmed a day and time for him to come by. I met him and Stephanie at the house on the day of our appointment and he had a clipboard in hand. I was sort of nervous about it and wondering if my property would be verbally abused in the process of his walkthrough but to my surprise there was little he had to say about it. I had to fix one window that had been painted shut many years ago (it was a safety concern) and supply a new fire extinguisher (doh! How could I miss that?). He gave me a week to get the repairs completed (even though it was taken care of the same hour he left) and returned after 7 days to my approved house.
We handled the paperwork right there in the kitchen. I was signing document after document. I felt like I was joining the Army again! All I had to do was supply a lease agreement that I normally had my tenants sign before moving in. He brought the rest of the contract paperwork. After 20 minutes of signing and explaining the position of the HUD/Section 8 standpoint, he left and I had my first tenant with a HUD voucher! I was glad to join the club. Stephanie has turned out to be a really great tenant and always has a pleasant way about her (I would be too if I only had to pay $100 rent each month!) . The rent for her particular house is $550 a month but HUD will only pay $450 so she is left with the balance of $100 each month which she always pays in a timely manner.
Even if Stephanie had turned out to be a rotten tenant and skipped town in the middle of the night, the government would continue to pay the rent on the property until I found a new tenant to replace her. The lease is typically for one year on a HUD backed property and it can be renewed as long as the tenant is willing to remain after the year is up. So far Stephanie has talked about sticking around for a long time and I hope to keep it that way!
Evicting Tenants!
OK, it’s illegal to board up the property with your tenants still inside and burn the place to the ground to collect the insurance money and solve your bad tenant problem at the same time, but I can understand why some landlords feel like doing this every now and then! I doubt any of us are really any good when it comes to arson anyway so let’s avoid the slammer if we can. It seems that every law out there is written in the tenant’s favor and for protection from the “evil” landlords. I’ve never really understood why this is.
You can ask any landlord or property manager which tenants are problem tenants and which are excellent tenants. They all have their favorites and their not-so-favorite tenants to deal with. Any landlord or property manager with a lick of sense will do everything they can to keep a good tenant happy. In the past I’ve discounted a month’s rent when a good tenant of mine was in a legitimately bad situation. He was never late with the rent or even complained about anything. He took great care of the property and even increased it’s value by adding some fencing and updated the ceiling fans. I didn’t even realize the interior improvements until I revisted the property a year later to do an annual walkthrough inspection.
It’s a pain to have to evict a problem tenant. Usually it’s for the reason of non-payment of rent. Rarely is there any other reason, unless they are totally destructive of your property. No matter how bad the tenant is, I still get the feeling that I’m doing something terrible to someone who’s in a bad situation when I go to evict them. This is a feeling that you will have to overcome in this business, or at least supress it. You cannot afford to let someone catch a free ride in this line of work or you will run into trouble with your own creditors. It all boils down to you or them that has to face the music . I’d rather it be them. I’ve played it too safe and responsible to let someone come along and try to ruin my credit that I’ve built over the years.
Now most of the time, problem tenants deserve a good slap in the face. They will avoid your phone calls, not come to the door when you drop by, or will hit you with a billion excuses why they can’t pay their rent. It’s amazing how many problems can develop for a tenant that you just met a few months ago who acted like they had it all together. Soon after, you realize that is a front they use on all new landlords they meet. They’ve always had the same problems but some of them have gotten very good at decieving unsuspecting “evil” landlords into allowing them to lease out their property. This is why it’s imperative to do your background checks and call the references listed on their rental application.
Before I evict a tenant (it’s usually been after a month of not receiving the rent payment plus the late fees on that rent), I will take a notice of eviction and tape it to the front door if the deadbeats aren’t home. My eviction notices basically let them know that they have exactly 48 hours to catch up their rent or I will file for eviction at the local Magistrate Court and hold them responsible for the filing fees plus all unpaid rent due. This generally gets a response from them one way or another and I usually get a sad story about this and that, but oddly enough they have some money to hand over. It may be the full amount or it may only be a partial payment. It’s up to you whether or not you want to accept any partial rent payments (I usually will if it’s a large portion of the rent owed) but just know that if you decide to accept the partial payment you cannot go forward with trying to evict them legally. Generally you cannot try to evict someone if they have paid you anything towards rent within the last 30 days, even if it’s as small as $50.
If you do not hear from the tenants at all then make one last trip over to the property to make sure they haven’t abandoned it. Sometimes you will have people flee into the night and the house will be empty of all possessions, except a load of unwanted items and trash here and there. If this is the case then the problem is solved. Use their security deposit to hire someone to clean it up and get the unit rent ready again. If there is anything left from the deposit then apply it to the unpaid rent balance. You’re still at a loss more than likely, but at least you don’t have to go file at the Magistrate Court now.
The Magistrate Court eviction process is really not that difficult as some people might think. Perhaps it is in other areas but I can only speak for my county. In my area, I have to pay a $69 filing fee for the complaint and then list the reason why I am evicting the tenants and also the amount the tenants owe, plus late fees. The Magistrate Court will send a deputy or some other type of law official out to the property and will serve them with an offical eviction notice from the county. There will be instructions on the notice of how they can dispute the eviction if they feel they are being treated unfairly. Usually they don’t have a leg to stand on. Either they paid the rent or they didn’t. The Magistrate Judge could really care less for the reason’s why the tenant didn’t pay unless it was the fault of the landlord for not providing a particular service that was supposed to be provided (like heat). In some cases tenants can rightfully withhold some rent if the Landlord doesn’t fulfill his side of the lease (usually by providing some type of amenity). The tenant has seven days to respond or the Landlord can legally take back his/her possession of the property.
Whatever you think or feel about the situation of evicting someone from one of your properties, just know that you WILL run into this from time to time. Do your best to always treat your tenants fairly but remember that you have bills to pay as well and if someone is not paying their rent, then they are actually robbing you of the money that you could be earning off of some other tenant that would be happy to lease your property. In most cases, the Magistrate judge will side with the Landlord if he/she can prove the tenant has not paid the rent or has committed some other offense that violates their end of the lease. Don’t be afraid of going to court and fighting for yourself if the tenants actually want to dispute the eviction. You won’t need a lawyer or anything in small claims court, unless you feel that you would be more comfortable with one. You will more than likely win the suit and will be awarded all rent due and then you can garnish the wages of your former tenants until you have been repaid in full!
Feel free to leave a comment and let us know of your bad tenant problems below!
Should I use a Property Manager?
Are you trying to figure out if you’re going to be the “Do It All Landlord” or the “Sit back and Call the Shots Landlord?” The answer to this question directly depends on the thoughts, feelings and drives of the individual. There are many pro’s and con’s to each side of this coin for instance:
If you manage your own properties you:
- Save More Money
- Have first hand knowledge of each and every situation that might come up
- Get to know your tenants better
- Don’t have to worry about trust issues between yourself and your property manager
- Can keep a better eye on your properties and not rely on the word of your property manager about their condition
If you hire a property manager:
- You have more time freedom to do the things you want or need to do that managing properties normally takes up
- You have less headache and frustration from dealing directly with your tenants needs, wants & desires
- You don’t have to worry about making repairs yourself and rely on the property manager to worry about upkeep
- You don’t have to be the “Bad Guy” when it comes to evicting tenants anymore
There are a lot more reasons to hire or not to hire a Property Manager and there are extensive books written on the subject. I highly recommend reading the book “The ABC’s of Property Management” by the Robert Kiyosaki “Rich Dad” team. It’s a very insightful book that is definitely worth it’s weight in gold. I have read and recommended it to many others who have found it very helpful in the past when they too were contemplating the subject. Let me know what you think about it!
