It’s a landlord’s worst-case scenario: a non-paying tenant has occupied an investment property. Rent is typically due on the first of the month. It is considered late on the second day of the month if the tenant does not pay. When tenants quit paying rents, landlords suffer. As a landlord, it’s very important to understand your options to resolve the situation before getting to serious measures, such as EVICTIONS!
Here are some suggestions on how you can mitigate your financial impact of non-paying tenants.
Evaluate the situation
Review the tenant’s history. Have they paid late in the past? How long will you be able to pay your mortgage payments and other financial obligations if the tenant quits paying altogether? Once you have a good handle on your situation, talk to the tenant. You might find out it was just a bank error, or they just forgot. Sometimes the best solution is to work out a payment plan with your tenant.
In Texas, if rent is due on the first of the month, you can assess a late fee on the fourth of the month.
Rent Assistance Programs
Keep a list of local community agencies and churches in your area that offer rent assistance and share them with the tenant. If approved, payments are usually made directly to the landlord.
Offer Cash for Keys
Eviction process can take months and that means months without payment of rents. At this point, you should weigh your options. Even though it does not sound right that you would have to pay a tenant who owes you rents to vacate your property. Offer them an attractive amount and give them a deadline to vacate. It’s not recommended to give the tenant cash or money until the property is vacated.
Serve Notice to Vacate and Demand for Payment
Know your state and local laws! In Harris county, Texas, a three-day notice to vacate and demand for payment can be served on the second of the month if rent is not paid. When you serve this notice, follow your local laws to include all the required information and serve it properly or you must start the process over.
Due to COVID-19, you can still serve the notices; however, you might have to give the tenant thirty-day notice or longer.
File an Eviction Suit
If the tenant does not pay rent in full and does not move out of the property, the landlord can file an eviction suit for the right to actual possession of the property. In Harris county, Texas, you can file your suit in the Justice Court of the Peace Precinct in Harris county where the property is located, and you will have to pay a fee to start the process. You can choose to perform this process personally or hire companies like Nationwide Eviction, Texas Eviction, or a local eviction company.
Also due to COVID, there might be an eviction ban in your local area. Check with your state and county laws.
Managing your own rentals can be a daunting task. You might consider hiring a property management company to handle all the day to day operations and allow you free time to relax on the beach!