Par for the Course or Reason to Worry?

Question

Hello! We purchased our first investment property about two months ago. We live in Florida, but the triplex is in the Cleveland. The neighborhood is halfway decent... it's in the Clark-Fulton area near the hospital, if you're familiar with Cleveland. It's a mid-to-low C grade area, but it's being revitalized, so we have some hopes of it turning into a C+ area at some point. We purchased it with two tenants already in it and one vacant unit, and we have a property manager handling everything.

Unit 1, the tenants didn't pay February's rent. Today is March 1, so I'm guessing they're not planning on paying March, either. The PM mentioned the possibility of eviction, but as far as I'm aware, nothing has been started yet.

Unit 2, the tenants did pay February's rent and said they'd like to move out in February. I have not heard from the PM that they moved, so I'm assuming they did not, at least not yet. I have no preference as to whether they stay or go, as long as they remain reliable payers or we get someone else in there who is reliable.

Unit 3 has been on the rental market for 5-6 weeks now. We reduced the asking rent after two weeks, but still nothing. PM said there have been a few showings but otherwise, nothing is happening.

I realize it's wintertime and people don't want to move in the winter in Cleveland unless they absolutely have to, so I'm hopeful that we'll see some action on the vacant unit this month or next, but I'm wondering if this is all just par for the course or if we should be concerned. Our goal was to buy another property (probably a duplex) this spring or summer, but I'm not sure if we should  jump into that or hold off a while and wait and see.

Any advice/suggestions/reassurance?

Theresa Harris · Answer

Talk to your PM.  You need to get started on the eviction for unit 1.  For unit 2, if they were under a lease and left early, then they will have to pay a penalty for breaking the lease.  With unit 3, as the PM where it is listed and if any similar units have been rented in the area recently (ie is it just your unit or it is slow).

Adam Martin · Answer

I’d see tenant number 1 and vacancy 3 as reason to worry.  You hire a pm to handle these types of situations and if they haven’t taken action on a non paying tenant in a month or at least laid out a game plan I’d be very worried.  You are north of me but mid February rentals really ramp up as people are wanting to move and they have their tax refunds to afford the first month and deposit.  I’d call today and if they don’t have a good response to tenant 1 they would need to delist the vacancy because they are fired.

Bruce Woodruff · Answer

I believe you have a few valid reasons to get out of it. You listed them in your original post. Lack of performance is a good legal reason to break any contract, I would doubt they wil dispute it....

Bill B. · Answer

Depending on local laws there should have been a 3-5-7 day notice to pay or quit regardless of promises to pay. And then eviction should have been started. All this should have occurred without your input. This is their job.

Make sue you have a PM with at least 4-500 units under management, not a realtor doing it on the side. They should have a process/system in place that automatically takes care of late rents. As far as the hard to rent unit. They also should have known market rent and where to advertise it to get traction. This is their job.

Shane Kelly · Answer

I would definitely come down on your PM. It sounds to me like they're not doing this to the quality I would be expecting them to.

Bruce Woodruff · Answer

Get rid of bad tenants and wait for good ones. This is a waiting game sometimes....If this continues then you have to consider whether you have chosen a bad neighborhood and get out....

David Ramirez · Answer

I wouldn't worry that much, make sure your PM gets them out and stay patient to find reliable tenants. It's not uncommon to face challenges with rental properties, so it's important to stay focused on your goals and trust the process.

Michelle Cohen · Answer

I do have some concerns about this PM because communication isn't what I'd call prompt or super clear. We do have a year-long contract, though. Not sure if we can get out of it (or if we necessarily want or need to at this point).

Michelle Cohen · Answer

Thanks. Unit 2 is month to month, so there's no penalty. I emailed the PM last week about the eviction and as far as I know, nothing has been started...

Par for the Course or Reason to Worry?

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