Holidays, vacancies and late payees
I got a call recently from someone needing advice about their landlord/ tenant relationship. This caller was the tenant, rather than the landlord.
This tenant was upset that they had just received — and I quote — “a nasty letter” from their landlord. The letter said the tenant either needed to pay what was owed in full or move from the property.
I explained that this was called a letter of demand and then asked how much they were behind and what caused them to get that way.
As it turned out, the tenant had been making partial rent payments for some time and was trying to get current after some financial difficulties. This month, however, they were unable to make the rent payment in full and had shorted it another $100.
When I asked what led to that decision, the tenant responded that they had to spend that extra money to buy Christmas gifts for their kids.
Just so you know, this call came in shortly after Black Friday.
I began to explain to the tenant the reality of the situation. You see, they had been behind for some time, and it was apparent that the landlord had been trying to work with them. But because the tenant was putting the landlord on the back burner, the tenant had used up the last of the landlord’s good graces.
I tried to explain how landlords don’t get to pocket the rent in its entirety. Instead, they have to use that money to make a mortgage payment, along with taxes and insurance on the property. They also have to allot a portion of each month’s rent to pay for future repairs. What is left over is what the landlord gets to keep.
Altogether, the tenant was $300 behind. And I posed this question: “How would it impact you and your family if your paycheck was shorted $300 this month?”
The tenant hadn’t thought of it that way before.
I went on to explain that the landlord isn’t being mean, and truthfully they probably don’t want the tenant to move.
You see, December is not a great time to be looking for a tenant or to have vacancies. For one, empty houses are a risk for busted pipes and rodent intrusion during colder weather.
Finding a good-quality tenant during this time of year is another issue. Most people don’t want to move during the holidays. They want to have stability so they can have their family over and just relax.
From our experience, a great deal of the people who are moving during this time of year are the ones that tend to move frequently — a practice that doesn’t make for a good tenant. And of the ones who are planning their moves responsibly, a large portion of them have overspent on the holidays and don’t have enough in savings to cover moving costs.
And just so you know, our knowledge has come from multiple years’ experience having vacancies during this time of year, including this one. We have two rentals we are trying to fill, and I learned yesterday we are getting another one back. Not good.
We have had one of those houses on market for over a month. We have received tons of applications, but most applicants either didn’t have enough money to move, didn’t make enough money to afford the house or haven’t been on their job for over a year.
Why don’t we just put the first person with cash in the house, you might ask. Because we would rather pay for another mortgage payment on a vacant house that is in good condition than install someone we might have to evict for nonpayment who could’ve harmed the house while living there.
With that in mind, we will keep going until we find a good tenant.
Back to the phone call:
After I explained that the landlord probably didn’t want the tenant to leave, I told them their best course of action was to get face to face with the landlord. I told them to be respectful, contrite and let the landlord see that they were willing to do whatever it takes to make things right.
I hope it worked out.
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.