My Experience with Eviction - A Word of Warning to All Self-Managed Rental Property Owners
Make no mistake about it…
It sucks for everybody.
For you as the investor.
For the tenant.
It sucks your time.
It sucks your money.
It sucks your energy.
The only people who benefit from it and don’t get beaten down by the process are the lawyers and the court system. (No, I’m not going to bash on the lawyers today, or ever, as I know a lot of good ones. I think they have a bad wrap it seems though, as in times like this they make their paycheck while others lose theirs. I still think it would be a lot worse without them.)
Going in to the eviction process, we (myself included) think that we are going to kick the tenant to the curb, get your property back, make him regret that he ever stopped paying you, get him to pay for all the damages he did to your property AND your attorney’s fees, and THEN somehow get a bunch of money on top too or wasting your time AND THEN get it all back from them within a month or two after you go to court.
Let me assure you…
It isn’t going to happen like that.
In fact consider yourself lucky to get a couple of the things above in a timely manner if you follow through with the eviction process.
“But why?” you say! “I’m in the right! It’s my house! They failed to pay rent! They broke the lease!”
Some tenants will admit fault, say they fell on hard times and try to come up with an arrangement but some (perhaps feeling they are backed into a corner) may come out swinging with arguments, weird random legal processes (having done their own homework that they found in the back pages of google) and accusations to slow the process down.
So just because you have a lease and a lawyer and believe that “it’s not their house, it’s my house” therefore you should win…you may be in for a shock.
As the judge said very publicly and clearly to everyone in the courtroom at my first eviction as a landlord:
“Those who want to hear what I have to say, might not like what I have to say.”
I’ll say what I’m trying to say one more time a different way. I’ve never heard of or seen somebody coming out of eviction court with a big smile on their face.
It is just a big time and money suck for everyone and afterwards you’ll absolutely be making doubly sure you do a better job of filtering your future tenants more clearly. You’ll be raising the bar of quality and not listening to the sob stories or the person who can pay “all cash, three months up front and needs to move in today.”
After your first eviction you’ll be treating it like the business you should.
Here’s my thoughts on how to do this:
- Always keep the landlord/tenant relationship professional…especially during the eviction. If you’re self-managing and can’t keep your emotions out of it, don’t self-manage. You need to be able to follow a strict business and legal process here and keep all the personal stuff out of it.
- Find out whether your tenant is going to be able to get back on track or not. The best way to do this is gut feel I have found is a gut check. My gut is never wrong. It’s just whether I choose to be optimistic and (unrealistically) idealistic (and ultimately ignorant) or whether I choose to listen to what my intuition is telling me. Everyone has the right to make a mistake. Some people (by choice or otherwise) abuse that privilege. They’ve been good for months but have had a personal setback? Offer them a little grace period. Waive one late fee. Give them another week or two to come up with the rent (and remind them the next due date will not be waived). THEN if they miss this next deadline, you MUST follow through with the eviction process.
- Get the tenant out fast. If they can’t pay and you’ve started moving forward with the eviction process. Instead of having it drag out for another month or three (and yes believe me, they aren’t leaving tomorrow! Even if they are “good” people and not milking you for the opportunity to live rent free as “professional tenants”) offer them “cash for keys” by giving them funds to move on. What’s that you say? Give THEM money? Yes, that’s what I’m saying. Believe me, the $500 to leave now and have them out (say, they are behind one months rent plus you give them the $500 is better than you being three months behind plus court costs etc).
Make sure you get them to sign a lawyer approved agreement saying they are breaking their lease early and are leaving in exchange for the funds you are giving them and waiving the owed rent. This way they can’t just take your money as well AND still stay there. If they did you would have the extra agreement should something end up in court.
- Get your lawyer involved. When should you get your lawyer involved? If you haven’t done so already you’ve already wasted valuable time. And notice that I said YOUR lawyer not a lawyer. As a property investor, you should already have your team of people interviewed and ready to go and before you need them. You need to have your system for eviction and understand your local laws on the process downpat WAY BEFORE you actually need it.
Have you read your local state and county laws on landlord tenant relationships lately? Ever? Google “landlord tenant laws” with your state/county/city to find out what you need to do.
If you have a tenant in already you should have done it already. If you are trying to evict, you DEFINITELY should have done it already.
- Get a property manager involved in future. I get it. You wanted to save the $100 a month or whatever it might be to “manage” your own property because that is MORE PROFIT for you right? Yeah, but it’s MORE WORK too. Work that you need to enjoy enough to want to get involved with it enough to be successful at it.
Self managing is like any other skill. It takes time to learn to do well. And is saving that $100 per month really worth it when that toilet breaks at 2am on a weeknight and you have to run around trying to get things taken care of?
Short answer: stick with what you are good at and enjoy. If you don’t enjoy every aspect of property management, outsource that part of it and pay good money to get it done right. The value of your investment depends upon it.
- Ask yourself how far you want to follow through with the eviction. Is it better to get them out quickly? Is it better to try and get the money back? Do you want to show a bit of leniency and mercy in the hope that it maintains a relationship with them?
As property investors, it’s our job to make money, yes. If you want to be right, well, that’s probably just your ego talking. It’s our job as humans to maintain a sense of peace and happiness, and to be a good person along the way. Though this can be tough in the face of a vindictive, defiant, arrogant, self-entitled terrorist…sorry, sorry, tenant. I mean tenant…who has chosen to live rent free because they read somewhere something that makes them believe they can stop paying rent.
So, just breathe and follow your process to get them removed, get the property cleaned up when they move out (contact insurance if need be) and then get it re-rented.
And finally… just know you probably aren’t going to see much or any of that money that they owe you, even though you were awarded a judgement, because, let’s face it, if they really cared about their credit report they wouldn’t have let it fall behind that far in the first place.
So, do you just move on and just let it go? Do you spend another couple of hundred dollars to make sure the judgement stays recorded as a collection on their credit report as a warning to future landlords and a gift and a reminder to the ex-tenant for them to uphold their agreements in future knowing there may be little monetary return to you?
This is a question only you can answer.
Something to meditate on next time…
(I’m sorry if this post was a bit dark. I’m just coming off of a third eviction (in my self-managed properties) and so I’m a little spent spiritually right now, having asked myself “why me?” multiple times over the past few months.)
Anyway, onward and upward!
To your success!
PS Want to get started in property investing? Want to boost your investing game? Want to shoot the breeze and talk property?
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DISCLAIMER: The information found on these pages is based on my personal opinion and experiences and should not be considered legal, professional, investment or financial advice of any kind.
The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a suitably qualified financial professional. My thoughts and opinions will change from time to time as I learn and accumulate more knowledge.