Tenants not paying rent

[Kyle Soudalan]

I know, this topic probably comes up once a week. As usual, newer investors try to exhaust all their options for what to do. Send a notice, eviction, "cash for keys", etc. And more experienced investors likely have a streamlined process of what to do every time they have a tenant who stopped paying rent.

Would anyone pay a service to avoid the headache of dealing with a tenant not paying rent? I.e. pay a monthly fee (X% of monthly rent, for example) to a company that will be responsible for serving notices, paying the legal costs, etc. in the event a tenant ever stops paying rent. Of course that eats into cashflow a bit, but it provides peace of mind (and a large hole in your accounting for losing month(s) of rent) financially and emotionally (because you don't have to deal with it). And while certain kinds of insurance may cover this, that is only financially. You still need to go through the manual work to get the tenant to either pay or evicted.

If not, without repeating the usual suggestions on what to do, what's a unique way that you would handle the risk of future tenants not paying rent?

[Nathan Gesner]

Quote from @Kyle Soudalan:

I don't know anyone - except attorneys - that provide a service only for cleaning up messes. Even if they did, it would likely cost more than regular property management.

Hire a PM. They will protect you up front by properly screening applications and avoiding a lot of the problems. For those that still sneak in, they have processes in place to nip problems in the bud before they grow to be a costly problem. And if it still gets beyond that, many of them will handle the eviction for you.

I handle everything for my owners. If I place a Tenant that has to be evicted, I handle the eviction at no cost to the owner. Because I'm eating that cost, you better believe I try to avoid getting to the point of needing an eviction. I currently manage around 400 units and I've only had to evict one tenant in the last nine years.