I'm letting a tenant out of their lease today.
They simply can't afford the rent anymore. The boyfriend lost his job rather suddenly at the end of last month. They texted in a panic – I told them to calm down. I spoke with the girlfriend, now the sole breadwinner. She had $400 of the $650 rent. I told her to give us that, and let us know by the 15th whether you want to stay or go. There's no reason to freak out. This can be worked out, one way or another.
Unfortunately, the three weeks have passed since that panicked text, and the young man hasn't found another job. The good news is they have a parent with some spare space until they can get back on their feet. And they're leaving things cool with their landlord by being honest and cooperative. They'll clean the place up nice so I can show it to prospective new tenants – I already have one guy who wants to see it Monday. With any luck I'll get it rented quickly, and they will even get some of their security back. They'll get a good reference from me, too. Because they did it right.
Why Am I Letting These Tenants Break Their Lease?
Legitimate financial crises can happen to anyone, but so many tenants do it wrong. They just don't pay. They make me chase them. They leave me no choice but to file eviction. And then they leave (eventually, sometimes with the constable escorting them out at the bitter end) with a filthy apartment, rotten food in the fridge, garbage and old mattresses everywhere. This is why I'm letting my tenant out of their lease with my blessing. I want to encourage people to do the right thing, not the wrong thing.
It's a tough business, this landlording. I learned several years ago exactly why most landlords are assholes. I've been building Systems – policies and procedures that take the emotion out of the job that needs to be done. Last week I wrote about a System for filling empty units: http://thisgingerjustsnapped.weebly.com/blog/a-system-for-filling-vacant-units-rough-draft
I put that into practice this week with our upcoming empty at West River St., a six unit with unusually large apartments close to Wilkes University. I'm in charge of the marketing, and I will approve the applicant and sign the lease. I have farmed out the two jobs I hate – going through the tenant screening over the phone and physically showing the apartment.
So far the showings have been slow. That's expected because the rent is high, due to the massive size of the unit and the fact that we pay for the heat. Only three showings were booked, and only one showed up – a single mom with a great job who is on Section 8 because she has five kids! The apartment is certainly large enough for them, but there is a lot of paperwork involved in Section 8. We'll see if she really gets back to us tomorrow or not.
I really have to spend a morning walking around the Wilkes University campus and putting up the fliers I had made at Staples using one of their cool online templates:
They simply can't afford the rent anymore. The boyfriend lost his job rather suddenly at the end of last month. They texted in a panic – I told them to calm down. I spoke with the girlfriend, now the sole breadwinner. She had $400 of the $650 rent. I told her to give us that, and let us know by the 15th whether you want to stay or go. There's no reason to freak out. This can be worked out, one way or another.
Unfortunately, the three weeks have passed since that panicked text, and the young man hasn't found another job. The good news is they have a parent with some spare space until they can get back on their feet. And they're leaving things cool with their landlord by being honest and cooperative. They'll clean the place up nice so I can show it to prospective new tenants – I already have one guy who wants to see it Monday. With any luck I'll get it rented quickly, and they will even get some of their security back. They'll get a good reference from me, too. Because they did it right.
Why Am I Letting These Tenants Break Their Lease?
Legitimate financial crises can happen to anyone, but so many tenants do it wrong. They just don't pay. They make me chase them. They leave me no choice but to file eviction. And then they leave (eventually, sometimes with the constable escorting them out at the bitter end) with a filthy apartment, rotten food in the fridge, garbage and old mattresses everywhere. This is why I'm letting my tenant out of their lease with my blessing. I want to encourage people to do the right thing, not the wrong thing.
It's a tough business, this landlording. I learned several years ago exactly why most landlords are assholes. I've been building Systems – policies and procedures that take the emotion out of the job that needs to be done. Last week I wrote about a System for filling empty units: http://thisgingerjustsnapped.weebly.com/blog/a-system-for-filling-vacant-units-rough-draft
I put that into practice this week with our upcoming empty at West River St., a six unit with unusually large apartments close to Wilkes University. I'm in charge of the marketing, and I will approve the applicant and sign the lease. I have farmed out the two jobs I hate – going through the tenant screening over the phone and physically showing the apartment.
So far the showings have been slow. That's expected because the rent is high, due to the massive size of the unit and the fact that we pay for the heat. Only three showings were booked, and only one showed up – a single mom with a great job who is on Section 8 because she has five kids! The apartment is certainly large enough for them, but there is a lot of paperwork involved in Section 8. We'll see if she really gets back to us tomorrow or not.
I really have to spend a morning walking around the Wilkes University campus and putting up the fliers I had made at Staples using one of their cool online templates:
That last bit is an idea from Philadelphia's "Mr. Landlord" - offer a lower rent for someone who puts down double deposit. Offer a higher rent to someone who has a good income but would need you to "work something out with the security deposit" because that's an awful lot of money to come up with at once. It's something we're experimenting with, and I'll let you know how it works out.
I'll hit the Wilkes University student center with these fliers, the library, the bookstore, that little Starbucks on South Main, anywhere they'll let me put one up. There are a million other things I need to be doing, but this is important.
I also need to send letters out to my current tenants in that building, offering them a $100 finders' fee if they find me my next tenant. I've been hesitant to do so, because then they'll know what I'm charging for rent - $960. The boys on the first floor are paying $975 for a three bedroom – but it's a first floor unit, the layout is much more open and spacious, and they have one and a half baths. Still, I don't want them getting upset. The boys on the third floor are paying $1100, but I'm including all their utilities, their unit has a slightly nicer layout and they get a better balcony view. And the current tenant is only paying $800 – but that's because our former property manager gave her a deal when she moved in in November 2015 after the place had set empty since July. The last thing I need is her pulling aside my prospects and telling them they should negotiate me down.
Enough avoidance. I just need to suck it up and do it.
Showing a Rental When The Tenant is Still There
It is hard showing an apartment when someone is still living there! Our current tenant does not want anyone in her unit unless someone is home, so we can only show it after 5 during the week and anytime on the weekends with 24 hours notice. That's not totally unreasonable, so I'll abide by it. She also doesn't want anyone painting or cleaning the place for the next tenant until she is completely moved out. That I'll let slide for now, but if someone puts down a deposit for an August 1st move in she's going to have to accommodate! And she keeps her place so dark. All the bedroom doors are closed down that long, skinny hallway. Let some light in! Put some shades up! It's still her house, so I hold my tongue. Units are much easier to show when they're empty, and not full of the clutter of half-packed boxes. But that's the business. I want to show it now, with the tenant still there because I'd rather not lose a month's rent if I don't have to.
And now I have two empties to fill. I'll go around to Wilkes University Monday morning and get all my fliers up. I'll write the letters to my current tenants explaining the $100 finders' fee for picking their neighbor. I'll post a Craigslist ad for the half-double where my tenants' job loss broke the lease. Then I'll call the two local newspapers for that one. I've already offered the neighbors on the other side as well as the departing tenants the $100 finders' fee. After that, the marketing is done. Then I just wait. Hopefully not too long.
Danger: Don't Rush The Process of Filling a Vacant Rental!
Having a vacancy or two can be painful. There are expenses – even if the departing tenant leaves it nice there will likely still be cleaning and painting to do. If they don't leave it nice the expenses can be astronomical!
The nice tenant will expect their security deposit back pretty quickly – the law says thirty days but expect them to hound you after seven. And they want it back whether or not you've re-rented the place!
There is time involved – in marketing the property, calling the papers, designing the online ads and any fliers, and putting them up. There's screening the calls and doing showings. Or there are expenses for these things if you hire someone other than yourself to do them.
There may be a tendency to rush the process. To take shortcuts with tenant selection just to get the unit filled. Don't.
Be vigilant. Slow down and enjoy the process. Take notes on what works well and what doesn't, so you can tweak your System. If you absolutely hate something the way I hate returning the phone calls and screening tenants, see if you can farm it out to someone else. If you look at this like a college course, it takes some of the sting out of it. That's what I'll be doing – getting some more continuing education credits in the School of Hard Knocks.
The reward will be happy, harmonious, possibly long-term tenant. We have a couple of tenants who have been with us for five years, and it's wonderful. So drama free!
I'll hit the Wilkes University student center with these fliers, the library, the bookstore, that little Starbucks on South Main, anywhere they'll let me put one up. There are a million other things I need to be doing, but this is important.
I also need to send letters out to my current tenants in that building, offering them a $100 finders' fee if they find me my next tenant. I've been hesitant to do so, because then they'll know what I'm charging for rent - $960. The boys on the first floor are paying $975 for a three bedroom – but it's a first floor unit, the layout is much more open and spacious, and they have one and a half baths. Still, I don't want them getting upset. The boys on the third floor are paying $1100, but I'm including all their utilities, their unit has a slightly nicer layout and they get a better balcony view. And the current tenant is only paying $800 – but that's because our former property manager gave her a deal when she moved in in November 2015 after the place had set empty since July. The last thing I need is her pulling aside my prospects and telling them they should negotiate me down.
Enough avoidance. I just need to suck it up and do it.
Showing a Rental When The Tenant is Still There
It is hard showing an apartment when someone is still living there! Our current tenant does not want anyone in her unit unless someone is home, so we can only show it after 5 during the week and anytime on the weekends with 24 hours notice. That's not totally unreasonable, so I'll abide by it. She also doesn't want anyone painting or cleaning the place for the next tenant until she is completely moved out. That I'll let slide for now, but if someone puts down a deposit for an August 1st move in she's going to have to accommodate! And she keeps her place so dark. All the bedroom doors are closed down that long, skinny hallway. Let some light in! Put some shades up! It's still her house, so I hold my tongue. Units are much easier to show when they're empty, and not full of the clutter of half-packed boxes. But that's the business. I want to show it now, with the tenant still there because I'd rather not lose a month's rent if I don't have to.
And now I have two empties to fill. I'll go around to Wilkes University Monday morning and get all my fliers up. I'll write the letters to my current tenants explaining the $100 finders' fee for picking their neighbor. I'll post a Craigslist ad for the half-double where my tenants' job loss broke the lease. Then I'll call the two local newspapers for that one. I've already offered the neighbors on the other side as well as the departing tenants the $100 finders' fee. After that, the marketing is done. Then I just wait. Hopefully not too long.
Danger: Don't Rush The Process of Filling a Vacant Rental!
Having a vacancy or two can be painful. There are expenses – even if the departing tenant leaves it nice there will likely still be cleaning and painting to do. If they don't leave it nice the expenses can be astronomical!
The nice tenant will expect their security deposit back pretty quickly – the law says thirty days but expect them to hound you after seven. And they want it back whether or not you've re-rented the place!
There is time involved – in marketing the property, calling the papers, designing the online ads and any fliers, and putting them up. There's screening the calls and doing showings. Or there are expenses for these things if you hire someone other than yourself to do them.
There may be a tendency to rush the process. To take shortcuts with tenant selection just to get the unit filled. Don't.
Be vigilant. Slow down and enjoy the process. Take notes on what works well and what doesn't, so you can tweak your System. If you absolutely hate something the way I hate returning the phone calls and screening tenants, see if you can farm it out to someone else. If you look at this like a college course, it takes some of the sting out of it. That's what I'll be doing – getting some more continuing education credits in the School of Hard Knocks.
The reward will be happy, harmonious, possibly long-term tenant. We have a couple of tenants who have been with us for five years, and it's wonderful. So drama free!