I have two rental houses (in different hoods) in which I am having to file eviction on almost every tenant I put in there. At each house, tenants have paid rent and lived there for min. of 6 months- 1 year. Since I practice Zero Tolerance, I find myself filing eviction the day after the 7-day P/Q notice expires. (I am filing another eviction on Monday morning at 8:00 a.m.).

Question: If you have a rental house in which you are evicting everyone you put in there, do you take this personally and assume this is your fault (you made the decision to rent to these tenants) or just blow it off and assume this just happens in some crappy Class C neighborhoods?

To keeps things in perspective here, I have 15 rentals that have good long term rent paying tenants. The above situation seems to happen only in 2 of my rentals. Just trying to figure why this situation happens and if I should ease up on ZT and give tenants move time to pay.

NE,

You are letting other peoples problems become your problems - reduce your problems

NHsailmaker (NH)

No I wouldn't sell it. Some properties lie outside the parameters of what most LL's here strive to do. They need a special touch to manage.

They (people) come and go,

some even stay for a while.

Isn't that how life works, in general ?

Ya cant holdem hostage.

It’s the tenant pool you are choosing from.

Have you considered your steps, procedures that you’re taking when interviewing the applicant ?

Any past eviction?

Home inspection?

3x rent

Are they uncollectible ?

Job history?

If all those are clear, next I would start analyzing the location of the home, does it have an obsolete floor plan, etc. ?

If all those check out, it could be a bum hous as NE, said.

I have had bum houses in good neighborhoods and in lower income neighborhoods, for me, it’s time to unload and put the money to better use. I make no money on a revolving doors and evictions. Think Kenny Rogers :)

I have one house that seems to attract certain people. Some of the winnahs I put in there were clearly my fault-- hoping for the best, and having it not turn out that way. But other people just seemed to be ordinary people-- or even otherwise successful people-- who attract trouble, or make unexpected poor life choices. Like there was the single trucker who was just fine-- until he needed major foot surgery and couldn't drive anymore. Or there was the genteel and affluent woman who managed the local nursing home-- who was fired because she slipped a job to her felon son.

Because those two addresses have a higher turnover, you've got a higher chance of getting someone in who just can't keep it together for a year without it affecting you, especially if they tend to come vacant at awkward times of the year. You've managed to reach a nice coasting speed on your other houses, and have found dependable people who aren't going anywhere. But if one of them did decide they were going to go follow a job opportunity that takes them away, or go buy themselves a house-- chances are, that house will be susceptible to a few misses as well until you can find someone who was as awesome as the steady person who left.

So you can either have a thorn in your side from having to evict someone at the first sign of instability, or you can have a thorn in your side by choosing to "work with" someone on the off chance they can get back on their feet-- or until you get to the time of year of your choosing. They're both irritating. And a lot of its success depends on the person in question, and the circumstances at play.

It may or may not be your fault.

Everyone I’ve ever had to evict would not pass my screening today, with one exception. Go back over the application, references, etc of these people and see if there was something you missed. There usually is. Adjust your screening criteria appropriately.

Ken (NY)

Thanks Deanna,

I would ease up on the ZT and talk. Example: I see your rent is late. When will you be able to pay the rent? What problem do you have?

The reason I say this is that some folks don't have checking accounts or direct deposit and have to be at work before the banks open and don't get off work until they close. That happened to one of my tenants this month. Saving money from the previous paycheck is not something they do. It's their fault but if you want to stop evicting people you have to deal with it.

One of the pair had to pay for a funeral in another country. So they question is, how much can you pay this month and next month to get to the amount you need to pay?

There is one caveat. The people who this happened to I may be evicting for wasting the garage with gas and chemicals and repairing motorcycles to sell which is a violation of the lease. It was not happening on Oct 3 land I found that situation on october 12. So you are dealing with unstable people in a way and I wish I had not acceptedd their late rent and filed on them because I don't know how much chemical damage was done in 9 days and I have to give them a week to get rid of the cycles. I am giving them 24 hours to get rid of all the gas cans and chemicals tomorrow if they are still there.

You have 15 houses that are doing very well and tenants stay long term lower turn over.

You have two houses that are a thorn in your side.

Whats the difference in the neighborhoods? crime? condition of houses in the neighborhood? School districts are rated poorly for the two houses compared to the other 15 houses? What are the factors that are out of your control?

During the screening process for the two houses since the tenant pool is questionable did you lower your qualifications and take a questionable tenant; over looking a negative.

Zero Tolerance is the best option, if you did AllyM of NJ policy and let people slide in those two house your dollars in eviction costs, back rents and damages will increase if you let the tenant slide. The cash cow then becomes a cash burden.

Sell your two problem houses and buy in the better neighborhoods.

IF you do decide to sell the two units; are there any dated areas that can be spruced up tp get a higher price for the two houses?

It gets old when you have the "Revolving Door of Tenants" that creates a costs due to AGAIN prep in 6 months to a year. Could it be you relax your screening process on the two problem houses? or is it out of your control due to the neighborhood conditions and its time to 1031 exchange to a house in your other rental property neighborhoods.

Prepare the two houses once the tenants are evicted and sell the two houses. Buy in a better neighborhood of your best houses.

OR once the houses are sold take a cruise around the world or complete a few of your buckets liists that you have put off!!! Enjoy your hard earned money!!! It maybe tome to reduce your number of units.

Roy are the two problem houses the pics you posted of the yellow ranch with the brick railing on the front porch? and the two story white 1st floor with green second story?

If they are the two problem houses consider painting the exterior:

Home Exterior

• Gray/Brown (greige — mix of gray and beige): +$1,526

Asford Greige DC-20 Broxburn Greige DC-19

• Brown (medium brown, taupe, or stucco): -$1,970

Front Door

• Gray/Blue (navy blue to dark gray or charcoal): +$1,514

I am not sure where I saw how the color does make a difference on a house.

If the two houses are not your problem houses; consider posting the problem houses with exterior and interior pics. There may be an area that you could update with a color change or pressure wash the house. The yellow house the brick should be pressure washed.

What is your fault is your choice of tenants. How do you suppose that this repeating situation happens after you screen tenants, eliminating documented deadbeats, late payers, high-risk applicants. So you need to re-evaluate your screening and decision process.

If you find that, by raising your screening process, that you cannot attract tenants, then you need to think about trading in that property. If the property is incapable of attracting acceptable tenants, then it is not a good investment and should be dealt with accordingly.

You are correct in being introspective.

Perhaps you should consider who your current marketing reaches, and who is not reached by your marketing. I think some marketing outlets only reach locals who are moving from one rental to another for the 30th time.

It all depends on how much you like to work. Certain places attract certain kinds of people. They are cash cows when they are rented because if they weren't it wouldn't be worth dealing with.

I don't bother with houses that attract high maintenance folks because lower stress levels are more important to me than more money. But some people thrive on doing this and happily find replacement tenants.

I would be considering the future prospects of those two neighborhoods.

Are they getting better, worse, or stagnant?

Is this likely to change one way or another for some reason (such as big employer coming nearby or a major employer leaving)?

ROY-- u da man!!!! This is a dream property as long as your putting people in them that you can collect from. Why do you care they're leaving----???? Your policy needs to be I only put people in these 2 rentals if they are on jobs they're not going to leave. It's a dream come true. You could have a bonus cash stream of 5 or 6 X tenants along with current tenants giving you cash-- althought only one will be on a lease-- collections for the other 6. GOLD MINE.

These two houses are not causing me any stress. I would be stressed out if ALL of my rentals were like this, but with only 2,..this situation is more of an inconvenience that anything else.

My suggestion is hold to your ZT policy, otherwise you stand to loose much more.

As to sell or not, that is a financial decision. Can you find replacements that will produce more income than these two do with their flaws? If so, might be worth a 1031.

I had your very situation a few years ago. I cashed out of one house that was barely making a profit because the location would only attract trouble and re-invested a few blocks away. It was one of the better decisions I made both financially and from a time investment.

Just to help you I'll let you in on a big secret. Back in 1996, 1997 and 1998, at the depths of the real estate depression, because there were so many vacancies, landlords would accept almost anyone, with money, into apartments without running background or credit checks. These were "C" class neighborhoods and applicants were mostly illegal day laborers.

You guessed it, almost everyone, around 65% were delinquent on paying their rent on time. 20% were making back payments and 25% were in eviction.

I tell you this story because I am a licensed contractor working for these landlords. They were about to loose their property and had to sell them or go bankrupted or insane.

So I purchased many buildings and then had to evict 50% of the tenants, work with the others to make a timely payment.

That was then and this is now. Still having over 100 tenants in those types of buildings, I always run a background check and full credit reports. Around 90% of the tenants I put into a vacancy pay their rent and leave on good terms. 10% I still have to evict. The tenants that I got when I purchased those properties -- around 20% are still with me paying on time.

Sorry I'm late... Roy I would look at the neighborhood with a fresh eye, decide if it is where you want to be. Meaning is it generally improving, declining or staying the same - and your best guess for the future.

You seem very knowledgable on your market. Might talk to some realtors and get their feel too.

If you sell, will you better than double your money after tax and costs? I kind of use that as a guide. Anytime you double your money I think it can be considered successful. Will the lost income matter until you reinvest? That might be a year or two. And of course what is the tax hit?

Thanks LTD for your answer. One of the houses of this post was the first house I paid $5K for back in 2011. (I bought the house from an insurance company). Since then, I have invested $25K in upgrades (new roof, HVAC, re-wired, re-plumbed, you name it this large 3/2 house got it).

What I have now is a free and clear $30K house that rents for $700.00/month. That is the good news.

Now for some bad news. This house is located in a neighborhood where is the zoning is all screwed up. On one side of the street you have Class C residential houses and just across the street you have these crappy looking businesses that cater to low income people. Because of this, I doubt this my house would ever qualify for conventional mortgage financing if I decided to sell it to a 1st time homeowner who needed a mortgage. If I do decide to sell, I would probably have to offer RTO or owner financing like MYOB does.

More than likely, I will hang on to this cash-cow since selling it would probably be more hassle than I am willing to deal with.

Hi Roy,

Good early morning. As you know, I manage rentals in the same kind of hoods that attract the same kinds of tenants that you have. I've gone thru periods where it seems like one house was a bum-magnet, and I swore I would sell as soon as the weather got nicer.

Well...time passed and things improved.

This time of year it's natural to think about thinning the herd, and I'm not sayings that's the wrong decision. But let's consider some facts...

1) You have a property described as a cash cow. The monthly rent is 2.3% of the "all in" price, although since my guess is you donated a lot of the labor yourself that number may be skewed a bit. Regardless of how it got there, that is it's performance today. I love properties like this.

2) You're evicting people in less than a year. That's too short. Folks gotta stay at LEAST one year or the turn over costs--even low costs--are killed. This must change.

3) Class C houses rarely sell to anyone but other investors. You might do okay if you get a newbie who can't write a check just yet and owner-finance it, or RTO it like one of Brad's beauties. I've got mixed feeling toward this kind of house and RTO: seems like it sets up a perpetual "churn and burn" scenario where you're kicking folks out who fail to close to deal every 2-3 years and collecting a huge fee to boot. Personally, I am not comfy with that strategy, but you may be and that's fine. It would improve the problem we discussed in paragraph 2 above since folks are staying longer.

Aside from eviction, are there any other major issues? Do they do a lot of damage and/or require significantly more clean up and repairs when someone moved out?

I think the goal is to get folks to where they can pay the rent. People with jobs? Yes, check that off the list. People who can manage money? No. So we need to get that fixed. I recommend that when you screen you next tenant, find the day their payday hits and set up your system so that the rent is due that day or the day after. Get the money when there is money to be had, before it goes to the Rent-a-Center and wherever else it goes.

Zero tolerance? Yes, keep it in effect. Once they're done paying, the goal is to get them out ASAP to limit your loss. I don't get quite as excited as myob does having mounds of judgments to collect, but it can help offset your losses. However, you might try timing your filings like I do so that the court date shows up on the 1st or 2nd day of the next rent cycle so you get two month's rent vs. one. That's why I file on day 7 that rent is late (Example: due on 1st, file on the 8th)... I almost always get a court date on the 2nd/3rd of the next month, so in exchange for waiting a couple of days to file, I get two months of rent awarded instead of one. That helps "pay" for my collector's fee.

Good luck. I'm rootin' for you!

.

Hi Roy,

Good early morning. As you know, I manage rentals in the same kind of hoods that attract the same kinds of tenants that you have. I've gone thru periods where it seems like one house was a bum-magnet, and I swore I would sell as soon as the weather got nicer.

Well...time passed and things improved.

This time of year it's natural to think about thinning the herd, and I'm not sayings that's the wrong decision. But let's consider some facts...

1) You have a property described as a cash cow. The monthly rent is 2.3% of the "all in" price, although since my guess is you donated a lot of the labor yourself that number may be skewed a bit. Regardless of how it got there, that is it's performance today. I love properties like this.

2) You're evicting people in less than a year. That's too short. Folks gotta stay at LEAST one year or the turn over costs--even low costs--are killed. This must change.

3) Class C houses rarely sell to anyone but other investors. You might do okay if you get a newbie who can't write a check just yet and owner-finance it, or RTO it like one of Brad's beauties. I've got mixed feeling toward this kind of house and RTO: seems like it sets up a perpetual "churn and burn" scenario where you're kicking folks out who fail to close to deal every 2-3 years and collecting a huge fee to boot. Personally, I am not comfy with that strategy, but you may be and that's fine. It would improve the problem we discussed in paragraph 2 above since folks are staying longer.

Aside from eviction, are there any other major issues? Do they do a lot of damage and/or require significantly more clean up and repairs when someone moved out?

I think the goal is to get folks to where they can pay the rent. People with jobs? Yes, check that off the list. People who can manage money? No. So we need to get that fixed. I recommend that when you screen you next tenant, find the day their payday hits and set up your system so that the rent is due that day or the day after. Get the money when there is money to be had, before it goes to the Rent-a-Center and wherever else it goes.

Zero tolerance? Yes, keep it in effect. Once they're done paying, the goal is to get them out ASAP to limit your loss. I don't get quite as excited as myob does having mounds of judgments to collect, but it can help offset your losses. However, you might try timing your filings like I do so that the court date shows up on the 1st or 2nd day of the next rent cycle so you get two month's rent vs. one. That's why I file on day 7 that rent is late (Example: due on 1st, file on the 8th)... I almost always get a court date on the 2nd/3rd of the next month, so in exchange for waiting a couple of days to file, I get two months of rent awarded instead of one. That helps "pay" for my collector's fee.

Good luck. I'm rootin' for you!

.

Plenty,

funny that you mentioned HUD tenants. I had a 3 year Section 8 tenant in this house and I think she was the only one I did not have to evict,...LOL. She moved out 2 years ago and called me yesterday and wants to come back to this 3/2 house. I am not sure if I want her back though.

Sid,

You bet, Roy! I'll always have cold ones waiting for you!