Most people tend to think that all landlords are millionaires who own high rises and 100 unit apartment buildings.
Contrary to popular belief, most landlords only have a few properties that they use to supplement their income or use to fund their retirement.
So what do you do when you own two rental units and both tenants stops paying rent?
You still have mortgages to pay, your lender will foreclose on your property if you don’t.
No worries we got you covered. Here are 5 things to do when a tenant stops paying rent.
What if My Tenant Doesn’t Pay Rent During COVID
1. Talk With Your Tenant
Get in touch with your tenant and find out why they have stopped paying rent especially if they have a great track record of paying timely.
The best way to approach communicating with your tenant is by phone or in person. Just make sure you follow up with a written note, so you have it in writing in case you need it in the future.
You don’t know what their reasoning might be. They could have simply forgot, lost their income, paid other bills, etc.
The point is you need to know why so you can move forward with helping them.
There are many government programs to help renters who are behind on payments. You can help you, tenant, by finding the information and giving it to them.
Here is a link to the Harris county website that you can give to your tenant. Harris County Community Services Department.
You want to try and help your tenant as much as you can. These are hard times and putting someone out because they lost their income because of the Coronavirus isn’t the right thing to do.
Tenant Not Paying Rent and Won’t Leave
2. Send a “Pay or Quit?” Notice
A pay or quit notice is typically given to someone who has failed to pay their rent. These notices give the tenant a few days (three to five in most states) to pay the rent or move out.
Basically its a formal letter that says ” you are behind on your payments and you have x amount of days to pay in full, or the lease will be terminated and you will have to move out.”
Make sure you send it via Certified Mail and keep your receipt.
This will prove that they received the letter if you end up in the eviction courts.
In it, include how much rent they owe and the number of days they have to pay in full.
Check your local or state laws for the amount of time to give them to make the payment.
A good common practice is to work with an experienced attorney in your area.
A pay or quit notice template simplifies a sometimes difficult task and ensures you deliver consistent notices every time you have a tenant who is falling behind.
If they don’t pay, and they don’t move out, then you can formally terminate their agreement and they lose the right to occupy the dwelling.
If they still refuse to leave, then you have to file an action with your local eviction court.
Do not confront your tenant and try to evict them yourself. You should always follow the state laws and have a sheriff execute the eviction.
Don’t put yourself in harms way. Evicting a tenant can be very dangerous.
How to File an Eviction Notice in Texas
3. File an Eviction Action
As we said above you don’t want to confront your tenant and try to evict them yourself. You don’t want to try and take the law into your hands.
The legal way to evict a tenant so you don’t get sued in court if by using the local sheriff.
If all else fails and the tenant still doesn’t pay, get an eviction lawyer. Try to do this as early as possible. You want to make sure you have sound legal advice to protect yourself.
- The next step is to file a tenant-landlord complaint in court. In many places, it is illegal to evict a tenant until all court proceedings are over. Keep in mind this process can take months.
- You’ll need to pay a fee and thoroughly complete all paperwork before you get a date for a hearing.
- On the day of your hearing, prepare what you’re going to say ahead of time, and have all your evidence documented, phone calls, emails, certified mail, etc.
When dealing with a tenant who pays late or partial rent, some landlords will recommend inspecting the unit as soon as possible to make sure that your property isn’t being damaged.
Remember you can only enter the property with the tenants permission or based on what you have in the tenant landlord contract.
After obtaining permission, it’s recommended that you document and take pictures of wear and tear and damages.
Once you’ve identified these, repair any damages and ask that the tenants fix those which are their obligation.
Schedule another inspection to make sure both parties have addressed the problems. Keep all documents in case you need them in court.
Can a Landlord Pay a Tenant to Leave?
4. Cash for keys
Can a landlord pay a tenant to leave? the short and easy answer is yes.
Typically landlords do this by offering cash for keys. Its a convenient way to get your tenants to leave without taking them to court.
Its a win-win situation, you get your property back and the tenant has an incentive to leave the property and not damage it.
Landlords also like this method because it saves them time, money, and the headache of having to go to court.
I Want to Sell My Rental Property
5. Sell Your Rental to an Investor
A great way to get avoid when a tenant stops paying rent is to sell your property directly to an investor.
Traditional home buyers are not looking to purchase a home with tenants.
If the tenant still has months on their lease before it ends, selling to an investor makes a lot of sense.
Many investor find it advantageous to purchase properties with a tenant already in place.
On the flip side, you won’t have to worry about getting your property cleaned and prepped for sale because investors buy homes as-is.
If you’re just tired of dealing with a bad tenant, you can skip the eviction process and sell the house to an investor like Sell Your Homes Houston.
We will buy the property as-is with the tenant and evict them ourselves.