How To Handle Bad Tenants

Bad payers are a problem for all landlords and we’ve all found different ways to deal with the problem. The best solution is one that gets the tenant back on track and avoids a costly eviction.

I use the term “bad payer” to cover late payers, partial payers, check bouncers, and non-payers. There are a number of ways to deal with bad payers. First, you want to do everything in your power to ensure that all tenants pay on time, every time. For example, set up a schedule of discounts for on-time payments or late fees for late payments. Many landlords favor the discount approach because it is an easier sell to a prospective tenant, but you may find it is not as effective in reducing late payments. Why? Because there’s no stigma attached to not getting a discount.
What do you do with a chronic late payer? First recognize that there are gray areas here. I believe your actions should depend on whether the lateness is consistent – for example, the tenant always pays between the third and sixth day of the month – or gets worse over time. A tenant whose lateness gets worse every month, despite your late fees and complaints about late payments, probably has little regard for your authority. When he is late enough to warrant an eviction notice, send it, and follow through. Chances are you’ve already seen other signs that this person is irresponsible- he doesn’t return your calls and may have misbehaved in other ways in the unit.

On the other hand, a consistent late payer is probably worth keeping, even if you can never get him to pay on time. Consider that the late payments are actually improving your bottom line. For example, suppose I have a tenant who always pays about the sixth day of the month, and is charged a $5 per day late fee on a $600 monthly rent. This tenant is giving me a 5% rent increase in exchange for a few days lateness – I’ll take that. Another consideration is how long it will take you to re-rent the unit. My properties are in New Hampshire and it’s very difficult to find a good tenant during the winter.

What You Should Do After Inspecting A Home

the first thing is that hopefully you chose an inspector that gives you a thorough report preferably with pictures and who prints the report on site so you do not have to wait for it for days. A typical inspection of a small condominium (about 1000 square feet) will take roughly one and a half hours and a small house about two and a half hours. This can vary quite a bit though depending on the condition of the house, whether it has a crawl space or slab foundation, attic, etc.

Now you have the report. Read it fully. Many people do not. Keep it for your bedtime reading. Use a highlighter and highlight points that you either have questions about or that you want the seller to handle before you actually close the deal.

Once the report is fully read, go over it with your agent. Now you can prepare a list of items that you want the seller to fix, repair or replace or to give you credit for. This is beyond the scope of the inspection but the inspection information can be used along with your agent to come up with a plan in approaching the seller.
A house is a physical item. Once you purchase it it will not stay the same. It will start to wear and need general maintenance. If the roof is not routinely maintained, eventually it will leak. If the heating and cooling system is not maintained it will not last its expected serviceable life. Everything has an expected lifespan and if not maintained or replaced when needed will result in a deteriorating scene.

methods To Reduce Debt And Improve Credit

As banks and other lenders tighten their lending requirements, real estate investors need to take another look at their own finances and what they can do to improve their overall credit situation to make achieving real estate investing success a possibility instead of a pipe dream.

If you’re like the average real estate investor, what’s holding you back probably isn’t a credit report battered and bruised by a spotty payment history. Instead, what’s preventing you from reaching your immediate goal is poor credit utilization – or simply having too much debt.
The reason for this is simple: Poor utilization. While credit card numbers one and three are under the 35% threshold, number two is at 72%.

There’s a quick and easy solution to this problem. Simply transfer part of the balance from the credit card with the $1800 balance to the card with the $200 balance. You will probably pay a balance transfer fee for the privilege, but in the long run your credit report
will be better off for it. It won’t be a major FICO score bounce, but a few points can mean the difference between an approval and a form letter.

If your problem is simply having too much debt, you’ll need to pay some of it off so you can start reaping the financial rewards available to real estate investors in control of their destiny. The number one area real estate investors (and all Americans for that matter) overextend themselves is in the area of credit card debt. If this is your situation there are a couple of different ways for you to tackle this debt.
If you don’t have home equity you can tap into to reduce your debt load and improve your credit, you’ll have to find another way. The fastest way of doing this is by adding up all of the balances on your credit cards – largest to smallest, irrespective of your interest rates. I know this flies in the face of the advice given by others who tell you to rank them according to interest rate.