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:
- 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.
- Lease Termination
If the tenant fails to pay, the landlord can terminate the lease after the notice period has expired.
- 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.
- 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.
- 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.
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.
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:
- 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.
- 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.
- 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.”
- 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.”
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?
- Have you ever offered a “cash for keys” incentive, and did it work for you?
- What’s the most you’ve ever paid out?
Let me know in the comments below…