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If you’re going to be a landlord, it might mean you’ll have a tenant who doesn’t pay rent on time.

What’s worse, tenants who are late on rent occasionally become unresponsive. That sets up a scenario where landlords have to decide what to do next.

When do you reach out to a tenant who becomes late on rent? 

Inman reached out to a few independent landlords who offered their advice on what to do if tenants are late on rent.

“One time a guy just literally left,” Ray Hage, an investor and landlord who owns nine units in Florida, told Inman. “I didn’t post a three-day notice, he just left. It’s a pretty common issue. It kind of goes on the landlord in a way where you have to get the right tenant in there first.”

Screen tenants and have a plan

While less helpful for landlords who already have a problem, several landlords said the key to minimizing what can be a common problem is to spend time screening potential tenants.

“Don’t wait until they are months behind before developing a plan,” Nathan Gesner, broker/owner of American West Realty and Management, wrote on a forum for landlords.

There are tools available to check tenants’ past rental history. Hage also said landlords should have a sense for how to read people.

“Just getting the right tenant in there avoids 90 percent of the problems,” Hage said. “That means someone that is honest, trustworthy — they have a stable job, stable income. They really care. Check with previous landlords that everything is good.”

Start communication immediately 

Multiple landlords recommended that, should a renter fall behind, start communicating with them immediately. Time lost on rent collection is money the landlord is still on the hook for, leading to either lower profits or a loss.

“The longer you can wait the longer they can draw it out,” Hage said. “Even if you’re in a place where it takes two weeks, if you wait three weeks you’ve lost five weeks total.” 

Different jurisdictions will have different rules and time frames for evicting a tenant and the notice that must be given to a tenant that is past due on rent. In Florida, for instance, Hage must post a notice at a property three days before moving onto eviction proceedings.

Begin the eviction process

If tenants are late and perhaps unresponsive, landlords must decide whether to try to work something out, like an unofficial payment plan to come up to speed on rent, or a different agreement to have the tenant give up their lease.

But multiple landlords recommended beginning the eviction process as soon as state and local regulations allow.

“Once non-payment occurs, always file the eviction paperwork. That is best practice,” Andrew Freed, an investor in Massachusetts, wrote on a landlord forum. “Even if they end up paying, [it’s] a small price to pay to not lose out on a month of rent since normally you need to give at least a 30-day notice.”

Hage agreed, saying landlords are taking on more risk by deciding not to start the eviction process immediately.

“You could take your sweet time and try to work with them,” he said. “It might be the better move sometimes, but you’re putting yourself at risk when you do that.”

Consider hiring a property manager

When in doubt, there’s always the option for landlords to work with a local property manager to handle rent payment, maintenance and evictions.

Hage is quick to point out that while the fee for a property manager might be close to 10 percent of the monthly rent, that percentage significantly cuts into a landlord’s profit on a property.

“Say your revenue is $1,000 a month and your costs are let’s say $600 a month. You make a $400 profit,” Hage said. “One-hundred dollars out of $400 is 25 percent. You’ve gotta say…is it worth hiring a property manager?”

The price might buy confidence that a property will be taken care of with minimal headaches, but it will also eat into cashflow.

Email Taylor Anderson

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