one of our home renters always have insufficient funds

**windman** · 12-19-2008, 06:02 AM

We own a home, and its being rented out right now. We rented it by owner, so as to save costs relating to using a realtor to find a rentor for us, because those costs are somewhat high. unfortunately, the people in the home we are renting it in, have not have funds for two of the months of which they have paid to live in, we've had to ask them twice for those funds, and this month, they have not had funds for their pet deposit, insufficient funds for that, though their rent went through ok (for this month).

what is acceptable and what isn't? should we be thankful we have a renter at all, and have to tolerate that kind of behavior?

we had to wait a little time to find a person to move in. so i guess we are just thankful to have them, but they are lousy with money, so i'm not happy about that. i'm hoping that is no reflection of how they are treating the home.

thank you

**PositiveAl** · 12-22-2008, 01:19 PM

HI:
As a long time investor/landlord I find it totally unacceptable for a tenant not to pay rent on or before the rent due date (usually the first day of the month).
Most people find that the way I do business is unbelievable since most landlords have late paying tenants. I have a rock solid written lease that lays down the rules for the tenants. Because of this great lease the tenants know that they must pay the rent on or before the 1st day of the month. If I don't receive the rent in my post office box by 10:00AM on the first of the month I EVICT them immediately. Most of my tenants are in the States of Massachusetts and California the two worst states to have tenants since the laws are all liberal pro-tenant, anti-landlord. Still I have no problems. I have been a real estate investor and landlord for over 26 years. I have bought hundreds of properties. I know how to handle tenants.

What you have to do is approach the tenants and let them know that you have to recieve the rents on time from now on, and they have to pay at least one fourth the back rent each month or you will begin eviction. I don't know what state you are from but if it is not Massachusetts or California it has to be easier than it is for me. Seek out your local landlord or real estate investment meeting and attend. While you are there ask other landlords about evictions and how to get people to pay on time. They will know the local laws, and you may even meet a constable, sheriff, or attorney that can give you more details.

One final word that any seasoned landlord will give you is that it is far better to leave a place vacant than it is to have a bad (non-paying) tenant living there. NO MORE BREAKS...Give them a warning, in writng, then be tough!!

**BlogLuvinTom** · 12-23-2008, 12:03 PM

So, evict them! Don't take that b.s. as this market is great for landlords. Rents are rising and the renter pool is larger than it has ever been. You do not have to put up with that today.

**PFLorida** · 01-06-2009, 09:03 AM

Both replies are dead on. I have only rented for the past 4-5 years however, I did learn a simple rule early on. If someone doesn't have the full deposit and/or any other upfront monies required by you to move-in, THEY WON'T BE ABLE TO PAY THE RENT.

Being firm but fair rather than "thankful" the tenant is helping with the mortgage has worked best for me. Good Luck to you.

**SilentPen** · 01-09-2009, 10:07 AM

Originally Posted by PFLorida

If someone doesn't have the full deposit and/or any other upfront monies required by you to move-in, THEY WON'T BE ABLE TO PAY THE RENT.

For the most part, I agree... but there's an exception to every rule. Military families often have to wait one month for their BAH to kick back into their paychecks when they move out of base housing, and more often than not they're happy to set up allotments to have the rent taken out of their paychecks before it even hits their bank account.

**VAInvestor** · 01-10-2009, 04:25 PM

We have tenants that are consistently late and sometimes have insufficient funds. They always end up paying a week or two late, and we charge them a $75 late fee. So, it has actually worked out well for us, since our effective rent is 75 dollars higher every month.

Our tenants complained about the late fees early on, but we were firm, and now they just automatically include it with rent.

You definitely have to set a tone that this is a business for you, not a hobby, and business policies must be followed. Good luck - I know not getting your money when you have to pay the mortgage can be nervewrecking.

**rbarrett** · 01-14-2009, 11:21 PM

As an owner of 44 rentals, I agree that a firm, no tolerance policy is the best way to go. I've heard every sob story you can think of and most are just professionals at playing the eviction system. I'd say 5 day late notice with additional fee. 10 days late you start processing the eviction. It's easier to have one consistent policy and not let emotions get in the way. Afterall, you're not the bad guy. You offer a clean, well kept living space for a reasonable price. All they have to do is pay the rent. It's only fair and reasonable.

**PositiveAl** · 01-16-2009, 08:46 AM

It's great to see that others such as rbarret who are also experianced landlords agree and want to help the newer landlords! The key is a uniform policy and procedure. Once your policy is in place, stick to it, no emotion, no discussion, no nonsense!

**CodyUT** · 01-21-2009, 12:12 AM

I have only 1 property in my investing career. Only 1 is all it took to lear about dead-beat tenants. I agree with rbarret... "Your're not the bad guy." If businesses gave everyone break then there would be no business. You may also think of it in a different way. Your tenants signed and agreed that they would pay you rent... They didnt do it, so you have an obligation to uphold the contract they have agreed to with you. It is only fair to everyone that all parties agree.