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Monday, August 13, 2007

Cashflow Day

Got my rent check today from Rental #1. I am pleased to report the tenants have finally paid the $200 they never paid back in May. No need to evict them.

I'm of two minds on this. These tenants have a history of late payments and I have already decided that I will not renew their lease when it is up in November. After reading what happened to Trisha's property after her tenant was evicted, I'm not really looking forward to having to evict someone. So to get the tenants out of the property, my choices are eviction for some reason and face possible property damage now or wait and try to find new tenants during the winter holiday season. If the tenants do decide to really damage the property if they get evicted, the property would probably be vacant for repairs close to the same amount of time as it would be if I tried to find a tenant during the holidays. In terms of lost rent, it might be a wash, but in terms of clean up costs, it would probably be cheaper to wait for the lease to expire.

In reality, I'll probably just wait for the lease to expire. August rent has been paid, so that only leaves two more months on the lease.

6 comments:

Matt said...

It's possible that the tenants will simply go quietly as well. You can say you want them out because you're moving in or because you're doing reno's.

Hopefully they don't damage the property.

Arianne said...

Hi Shaun,
We have a film about real estate coming out this weekend in Phoenix and I would love for you to see it in advance.
Let me know if you would be interested.
aayers@magpictures.com

Shaun said...

Arianne - thanks for the offer, however, my birthday is this weekend, so I'm pretty busy getting ready for that. I checked out your website (www.magpictures.com) and am assuming the movie you are talking about is "Closing Escrow." It sounds funny!

Doug O said...

Shaun, if the current tenant has taken care of the property, and they've now caught up with their back payments, you don't think you'd want to keep them? Perhaps roll them into a MTM lease, instead of locking in a full year... I'm not overly familiar with the OK laws, but you should be able to clear them out with 30 days notice on a MTM... That gives you more flexibility and the option to keep these tenants if they turn around and start making the payments on time... If they don't, give them the boot to the curb...
I've always been of the opinion where I try to work with my tenants who aren't destroying my property to get them to adhere to my rules... If they were destructive, forget it, they'd be gone...

Shaun said...

I've owned the property for about 7 or 8 months now and they have paid late 6 or 7 of those months. The $200 late payment this time was really due to a mistake by my management company, but I caught it fairly quickly and it still took the tenants two months to come up with it. Since I don't get the late fees, I'm not even getting extra cash for putting up with them being late.

Anyway, the month to month deal is an option. I'll have to see if my management company will do that. I also would rather keep existing tenants - for one thing, the management company charges less for renewing a lease versus getting a new tenant - and if they make their remaining payments on time, I may keep them. I won't be able to make a final decision until more time goes by and I see how their behavior goes. It's possible repeated talking to from the property manager has straightened them out..

Mystic Greg said...

I would wait the two months. For that short of a time like others said they might just leave. Especially if you drop some hints that you have someone new moving in in 4 months. That way they have a little time to plan for someplace else to live.

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