Tip #49

“Cash for Keys” will Motivate Bad Tenants to Move Out Quickly

Written on March 20, 2015 by , updated on March 23, 2015

Cash for Keys

How do I get bad tenants out of my property QUICKLY?

The answer is quite simple: you have to motivate them to move out voluntarily.

I know what you’re thinking: “But if they refuse to pay rent, and have a roof over their head, why would they want to move out?

Money. That’s why. You can pay them to leave.

What is “Cash for Keys”

“Cash for keys” is a method of getting a tenant to vacate a unit willingly by offering a cash incentive.

For low-income tenants or renters who are in a bind, “cash for keys” is an effective method of motivating them to leave, and can save you a lot of time, money, and headache.

If the tenant is occupying a property without permission, or has over-stayed their welcome, the only legal way to force them out is to go through the formal eviction process. Alternatively, you can pay them to leave, if they do so quickly and peacefully – thereby avoiding a lengthy and expensive eviction process.

The Formal Eviction Process

When a tenant stops paying rent, a landlord generally has to follow a specific process if they want to have the tenant forcibly removed:

  1. Proper Notice
    The landlord must send proper notice to the tenant that they have “X days to pay or quit,” which means the tenant has that many days to pay in full, or the rental agreement will be terminated. The amount of notice required is determined by state law.
  2. Lease Termination
    If the tenant fails to pay, the landlord can terminate the lease after the notice period has expired.
  3. File an Eviction Lawsuit
    If the tenant refuses to vacate, the landlord must file an “unlawful detainer” action, commonly known as eviction, with the local courthouse.
  4. Win the Judgment
    The landlord must attend the hearing (regardless of whether the tenant shows up), and convince the judge that the tenant is occupying the property without a legal right to do so.
  5. Hire the Sheriff
    After a judgment is awarded, the landlord can hire the sheriff to execute that judgment. The sheriff will remove the tenant by force, and oversee the removal of their personal property from the dwelling.

The problem with evictions is that they often take 4-8 weeks. That’s potentially two months of zero rental income! I don’t know about you, but I can’t afford to lose two months of rent.

If the rent is $1,000 a month, I could potentially lose $2,000 plus the cost of retaliatory damage by a vengeful tenant.

Sure, I have a security deposit that I could use as compensation for some of the damage, and most of the time I could ask for a financial judgment during the eviction hearing. I could even take the tenant to small claims court after the eviction, but even with a judgment for the debt, there’s no guarantee that I’ll be able to collect on it.

Related: How to Evict a Tenant – The Eviction Process in 8 Easy Steps

Illegal Options

If I have tenants who refuse to pay rent or move out, I’d rather have them leave in a few days rather than a few weeks.

Every week, I hear horror stories from tenants who have been forced out without due process.

For the record, lock-outs and utility shut-offs are called “self-help evictions” and are illegal in every state, so don’t even think about it.

Some landlords even try to harass the tenant by showing up unannounced, parking outside the house for hours, showing up at the tenant’s workplace, or even yelling through the door and scaring their children.

Just so I’m clear, it is illegal to:

  • Change the locks to the rental unit, thereby locking the tenant out;
  • Shut off essential utilities (like water, gas, or electricity); or
  • Harass the tenant (or family) in any excessive or fearful manner.

If you do perform a self-help eviction, or harass the tenant, you’ll probably be taken to court, fined, and then the tenant will still be allowed to live in the unit until you go through the proper eviction process.

Related: Tip #45 – Never Perform a Self-Help Eviction, Lock Out a Tenant, or Shut Off Utilities

Cash for Keys, Explained

Since I can’t legally force the tenants out by myself, my only options are to get them to leave voluntarily or go through the formal eviction process.

My favorite method of getting a tenant to move voluntarily is called “cash for keys,” and I typically follow this process:

  1. State the Facts
    Approach the delinquent tenant, and let them know that they can’t stay in the unit if they don’t pay rent. Period.
  2. Describe the Consequences
    Calmly but firmly, inform them that you will file an eviction case, which will create a judgment against them, remove them by force by the sheriff, and then sue them for damages. Make sure they know that you will even attempt to garnish their wages or tax refunds and hurt their credit if they fail to pay the judgment willingly.
  3. Give Them a Way Out
    If they still don’t seem to care about the consequences, you can say, “Hey, up until now, you’ve been a great tenant, and I’d rather not ruin your credit. If you can move out by friday, remove all your belongings, and have the place relatively clean, I won’t take you to court and I’ll even give you $500 in cash.”
  4. Inspect, Obtain, and Pay
    If they agree, then you should show up to the property on the move-out date, inspect the property, get the keys, and give them the bonus cash. Then, immediately change the locks. Don’t return the deposit until after you do a formal, thorough move-out inspection, check balances with the utilities, and deduct for financial and material damage.

Obviously, you’re allowed to offer whatever amount you want as a cash incentive. Sometimes a tenant will leave for $100, but other times, they will only be motivated by $1000 or more.

Of course, you don’t want to give money away unnecessarily. Sometimes just the threat of an eviction judgment will scare them away. But if it doesn’t, you might have to bribe them with a little cash.

Benefits of Offering “Cash for Keys”

As I mentioned earlier, offering “cash for keys” is an effective method of motivating tenants to leave, and can really save you a lot of time, money, and headache.

  • It provides the tenant with the cash needed to move out or put a deposit down on a new place.
  • It gives the tenant a “last chance” to save face and avoid a judgment.
  • It motivates the tenant to move out a lot sooner than if you proceed straight to the eviction process.
  • It allows you to turn over the property more quickly, thereby restoring your cash flow in days rather than months.

The most common complaint that I hear from landlords is, “I don’t want to give them any money, because they already owe me money, and I don’t want them to win.

My response:

It’s just business. You can’t squeeze blood from a stone, so you need to cut your losses and focus on finding a new tenant.

What’s Your Experience?

  1. Have you ever offered a “cash for keys” incentive, and did it work for you?
  2. What’s the most you’ve ever paid out?

Let me know in the comments below

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181 CommentsLeave a Comment

  • D Miller

    I was a Property Manager for 10 years and “Cash for Keys” may be something to try, just don’t give any money until they are out, get them out within a week or two, and don’t forgive the debt, that is what the deposit is for. To pay outstanding bills, once they have vacated.
    The best way to avoid any type of eviction is to do the work on the front end. Call the previous landlords, not just the last one but the one before that. If they are trying to get rid of someone, you could get stuck with their bad tenant. Call their job, make sure they have one and what type of employee they are. Good employee’s tend to be good tenants. The more you do at the front, the less you will do at move out.

  • DMazzco

    Cash for keys
    2x now one for $800 and deposit back $800 out in three weeks $1800 loss
    One for $1000 plus 1.5 months rent at $800 month total $2200 loss
    Both nice long tenants one 8 year one 23 years … turned bad or entitled same thing !
    Worth it yes
    Disgusting that people can’t just do what they agree to do and or save a damn dollar ..
    I’m out of rentals now forever,,, flipping homes instead very lucrative
    7 down no less than $70,000 profit yet
    But I need to inform people I do everything from roof to floor ,,,
    Profit is the result . If I had to pay for labor … likely profit would be zero!

  • Liz M

    My tenants haven’t paid me for 8 months. Finally they agreed to sign an agreement to vacate and I gave them $5,000 to move out. They are supposed to move out by the end of this month but it doesn’t look like they’re going anywhere… . What happens if my tenants don’t move out after signing the agreement to vacate? Can I get the cops involved to take them out? The agreement states that they agree to move out on that day and I would take over possession of my home.
    HELP!!

    • Nathan McLain

      That is why it is called “Cash For Keys” You get them to sign a lease/rental termination letter dated the day you exchange cash and keys. Once the document and KEYS are In your hand they get the cash. I have always been sweet up to this point. Lately tenants turn into Roaches and scurry around but never leave. So serve notice, & eviction papers, all the sudden $500 for moving costs for keys looks better than the day their belongings are on the curb.
      If you have a signed termination letter whether you have keys or not they are now trespassing you have the right to call the sheriff and change the locks. Make sure you inform sheriff first, and have a fast tough locksmith. If they want belongings tell them it will be on the curb.

    • Terry

      Oh, wow; did you hopefully finally get them out? Why did you give them the money before they moved out?

      With “Cash for Keys” NEVER give them ANY money until they’ve completely moved out and left the house “broom swept” (see the great advice in the above article)!

      I hope your story has a happy ending for you. Being a landlord can be very tough.

  • Linda Dornaus

    I have tried to find information online that applies to my case. My case has similarities with Cash for Keys. But I believe what was carried out was illegal. My question is: If a landlord has already started an eviction process through the court system, what limits does that now place on the landlord as in other options to get a tenant out? I am in California, it is my understanding from what Ive read that once the eviction process gets to the point of an UD filed in a court, no matter if the defendant is considered a tenant, guest, lodger etc…the defendant is now protected by law and allowed to stay at the property until the court hearing and a judgement is made.
    If my understanding is correct, is cash 4 keys still be legal option?

    • Denise

      I have evicted a tenant through the courts on March 21 2018 we are still waiting for a judgement the tenant moved out on March 27 2018 but still has the keys and won’t allow me in without notice or show it. Is there anything I can do because she moved on her own without waiting for judgement

  • Kim

    I’ve lived in my family’s home my whole entire life.When my parents died the house got signed over to my brother. But because I haven’t been staying there the last few months he changed the locks on the door and I don’t have a key to get in. What should I do?
    Also the reason why I haven’t been staying there is because there’s no bathtub no toilet bowl no kitchen sink no stove no refrigerator.

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