How The Cash For Keys Incentive Works For Getting Rid Of Bad Tenants
Even though you own the rental property your tenant lives in, you do not have the right to lock the tenant out if he or she fails to pay the rent owed. This may seem unfair; however, it is because there are laws in place to protect tenants. If you have tenants that are behind on their rent, you have the right to evict them through the court. The downside to this is that eviction takes time and money, which is why you may want to learn more about an option called "cash for keys." Here are a couple things you should know about this method of getting rid of a bad tenant.
What is this method?
"Cash for keys" is a relatively newer method landlords use to get rid of tenants that are behind on rental payments. This method involves paying your bad tenants to leave. If you can offer money to a tenant to move out, and if the tenant willingly does so, you will have possession of the unit faster and will be able to find a tenant who will pay you the monthly rental payments.
How does this method make sense?
Some people may wonder how it makes sense to pay someone that owes you money. The principle behind this is that it also costs money to let a non-paying tenant stay living in your unit, and it costs money to evict a person. By paying the person to move out willingly, you may be able to save money in the long run. If this incentive encourages the tenant to pack up and move out, you will stop losing money from this unit the day he or she leaves.
How should you use this method?
The best way to use this method is to talk directly to the tenant. Explain to him or her that you are planning on starting the eviction process, and that the result will be that the tenant will have to move out. Another result could be a judgement on the tenant's credit report that will not go away until the debt is paid.
You can simply ask the tenant then to move out willingly by a certain date and tell him or her that you will even through in some money if he or she does this. The amount is up to you; however, it should be enough to make the tenant seriously consider your request.
If you have any other problems or questions about your rental properties, you may want to talk to a real estate attorney or a real estate agent to learn more.