Sell or Hold Rental Property with Bad Tenants in Paterson, NJ

[Vignesh Kumar Subramanian]

I recently just did some posts https://www.biggerpockets.com/..., https://www.biggerpockets.com/... with respect to problems i have been facing in my rental property.

I am a new landlord and started real estate with a lot of aspirations. I got this property which is a 2 family unit in Paterson, NJ last June for around 240k, 15k less than listing price to account for rental issues i might experience with these bad tenants. My premise of taking it was end of Covid emergency and i thought within a year i could get them out. But i was wrong.

One of the tenant from the beginning it was clear that they cant afford the rent, so i was trying to get rental assistance and help both. But then i issued eviction on these tenants after they made no effort to get the assistance or communicate or effort to pay rent too. Their case was straight forward, but i delayed to get the assistance. I filed on Jan 2023 and its still on going with no sign of court date.

My other tenant a middle aged old lady with teenage kids is a characterless & foul mouthed lady who was always tried to make the environment hostile. I always kept my cool, rectified her to act respectfully. She also was very inconsistent with rent, but she paid eventually sometimes even after 2 months or so. But one good thing she always was on top of all rental assistance programs and tried to get the rent even late. Now she is behind 3 months. But recently over a call when asking about the rent she started shouting i couldnt take it anymore. Maybe i overreacted and I told her i will evict her. She is more than happy to go to court and not worried a little bit about the eviction. I dont want to put ego on the front, but somehow i feel i am done with her and dont want to get down and make the situation normal again.

I am a very optimistic person and thats my strength and weekness. I can visualize if I file eviction against this lady, i might have to wait one year from now (worst case) and then put some folks on rent with improved prices. I can get my double my EMI amount with other expenses with 5-8% COC!. Obviously there is also an opportunity cost. one year EMI that i am throwing away, i can better returns else where.

But my wife mainly feels that we have had enough and with a newborn daughter around, want me to be present mentally around. Given the market uptick, she wants me to sell the house. I dont know what to do really! Hold on and wait for the tenants to leave or sell and walk out without a loss. 

Experienced folks, any insights would be appreciated. 

[Vignesh Kumar Subramanian]

@Henry T. @Lindsay Op de Coul @Ben Taub Thanks for all the suggestions. Sorry i never reverted back here in the posts.

Update: I ended up evicting one of the tenant. Another should be out by July 15th, so waiting on that. In the interim i fixed the vacant unit and let it out for rent. 

Also i evicted the second tenant on my own without help of lawyer. Saved 1500$ on lawyer fees. I know its a risk i took. Learnt a lot though and i can definetely help if any questions about filing eviction.