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If a tenant has decided to play the covid card to the max, is there any reasonable scenario where an investor could come out ahead by playing the long game? Or with no end in sight, is the long game too uncertain?
This won’t help. I’m wondering if cash for keys has worked with more free rent promised to tenants. A few thousand dollars compared to 8 more months of “free” rent seems like an imbalanced trade.
I remember when the mortarium came out, the government said “this isn’t an excuse to not pay your rent” with a wink and a smile.
I’ve been fortunate that the few rental I have have been paying. But after reading your post, I got to thinking – what would a “What Box?” answer to this look like? Since we can’t legally force them out through the court system, can we persuade them to make a decision to leave on their own?
I haven’t read anything on the eviction moratorium or what a breach of lease (outside of Covid/income hardship) looks like. Maybe this is way out in left field.
But if tenants are not paying, they are in breach of the lease/breach of contract. Doesn’t that break the contract between landlord and tenant? Have you given them proper notice and adequate time to cure this? Is there verbiage in the lease that terminates the agreement due to this? Does the eviction moratorium simply prevent the use of eviction in the instance of non payment due to Covid hardship or does it say that you can’t enforce the terms of the lease?
So where I’m going with this – my outside the box idea. It’s your house – The tenant is living there in breach of the lease. Why not use “your” house for whatever “you” want.
What if you sold off “your” appliances?
What if you started storing really big furniture in “your” living room and kitchen. Why spend thousands on cash for keys when you can spend a few hundred on 10 used bedroom sets to store in the kitchen.
It’s “your circuit breakers” – what if you took the big one that says “200” and used it for another project you are working on?
I don’t know if these ideas are the solution, but maybe using your negative cash flowing property for bulk storage influences your squatters from finding an easier target
From what I understand, the rules are different in every state.
In some states, you can get utilities turned off if tenants don’t pay. But I’m not sure that’s allowed with the covid situation.
If I had a rental with a tenant not paying, I’d definitely offer then cash for keys.
It’s a sad situation for tenants and it is a tough situation for landlords who have a mortgage payment to make with no money coming in. To make matters worse, I’m reading that there are plans to extend the moratorium.
This reminds me of a house for sale that I saw. It’s a bank owned foreclosure in need of many repairs, but I have to think their pool of buyers is VERY small.
Subject property is being sold occupied with any and all occupants in AS IS condition. Neither seller nor broker can verify existence of any lease agreement, either written or verbal, nor any rental amount being paid, due or owing. Please don’t disturb the occupants. Access for inspections or other purposes is NOT guaranteed-property is not accessible for showings. Buyer is assuming ALL responsibility for any necessary eviction action.
There is an online auction next week. Despite what the bank/realtor is saying, I think talking to the occupants is very important in determining whether or not this is worth the risk. I would think finding out their intensions, treating them like human beings and possibly building rapport with them would be very important. I am sure I would have to give them significant money (5k?) to get them out, but that could be part of the cost of buying the house.
I know I could wholesale this property FAST in the market I am in, just for solving the problem. I think this will be a more and more important problem for us to solve in this environment (evictions suspended until March 31, but chances are the date keeps getting pushed out).
To echo Jay’s comments, this house does need significant repair, starting with new windows and they should be removed immediately upon contracts being signed. Also, new doors and mechanicals. And walls. 🙂
If the house has a tenant, the landlord may be able to get funds through an eviction prevention program, like “Biden’s American Rescue Plan,” or something already in existence.
If the house is vacant, that won’t happen.
So like most things, it depends upon the specific circumstances. If the house could easily be re-rented to an excellent tenant, that’s one thing. Otherwise, maybe a bailout program for tenants will be beneficial.
Seems to me like this is becoming more and more common. The 72billion in rents owned made me laugh in comparison to the 1.19 trillion dollar fund Biden is releasing soon.
I would look at your specific laws in your state. In my state and city (Toledo, Ohio) I am told by our local REIA president that evicting people isn’t really that difficult. Our laws/rules have 5 things the tenant must swear to in an affidavit to avoid being evicted. One of those is to show actual proof they contacted multiple agencies for help. I was told that if they are just playing the COVID game that they didn’t do one or more of these 5 steps or be able to show proof they contacted all of these agencies for help and therefore could be evicted. She said it was a little more work, but was certainly possible.
I haven’t had to address this personally, but it might be worth looking into the specific steps with a local attorney familiar with the rules.
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