Real estate investing offers so many benefits to the small investor, they couldn’t all be listed on paper.
From generating monthly cash flow to the numerous tax advantages, real estate investing is simply awesome.
However, there is one potentially uncomfortable part of the business that everyone wants to complain about.
Yep, you guessed it.
Evicting those nasty tenants, there I said it. There are several eviction scenarios that experienced property investors have come to expect. The key to managing these situations is for you to become both educated and experienced in this part of your business.
Remember, these situations are very manageable and predictible, if you have the right systems in place to handle them. Let’s go through a few of them shall we?
Reason #1: Evicting a Tenant for Non-payment of Rent
This will be the reason you evict a tenant 99% of the time. You should always be prepared to file the eviction when the rent has not been paid. The biggest mistake I see struggling real estate investors make is not filing the eviction soon enough.
The tenant will call in and give you a sob story. You wait for the rent to come in and it never arrives.
We always file for eviction on the 11th of the month, no matter the excuse or story. The tenant should be given the opportunity to bring the delinquent account current. But by filing the eviction you send out a clear message that everybody must honor their rental agreement.
Reason #2: Lease Violation
Grown adults should know how to behave themselves. In many landlord/tenant situations, they do not. That’s why we have leases.
In most cases, the lease violation involves disruptive conduct, disturbing the other neighbors or causing extensive damage to the property. When a violation occurs, the landlord must provide a written warning and give the problematic tenant an opportunity to remedy the problem. The judge will usually rule in favor of the landlord if it is established the tenant ignored a prior notice and the deadline.
Reason #3: Bankruptcy
In the event a tenant files for bankruptcy, an automatic stay prevents a landlord from continuing with the eviction proceedings until the bankruptcy is resolved, or the bankruptcy court permits eviction proceedings to continue by lifting the stay. This may require a motion to be brought before the bankruptcy court, asking for the stay to be lifted. This is a worse case scenario for many property investors.
This third scenario is a rare occurance – I have never had a tenant file bankruptcy. And I hope I never do.
