Inherited problem tenant with first investment property, what should I do?

Question

Hey there, a little background: I purchased my first investment property at the end of December, which is an owner(me)-occupied triplex located in DeKalb county in Georgia, USA.

Everything is going well, I've moved in to the unit, I have a roommate, and I've rented out the other unit to a great tenant, However, here is the snag: I inherited an existing tenant who had been in the property for almost 9 months and is historically chronically late on paying rent, but he has always paid it.

His story: He apparently used to have a stable job when he first got the lease, but now he does freelance general contracting/handyman work. He really is a great tenant other than not paying on time, he never has people over, no pets, smokes outside, he never makes a lot of noise, he keeps his place cleaner than I keep my own.

He's very friendly and likable guy, always is reassuring that he is going to pay and pay the late fee when he gets paid and that he understands "business is business" and he's "not going to let me down". But I know he didn't pay December's rent to the old owner until the 23rd, and I know from the power company that as of the 15th of this month he was about to get his power shut off for non-payment (not sure if it did or not).

He has yet to pay me for January ($630 + $100 late fee) and it's fast approaching the end of the month. He assures me that he will pay in full as soon as he gets paid for this project he is on, and he is going to try to pay me on Friday (24th). I do have his full security deposit of $630 that was transferred to me from the previous owner.

This is my first rodeo and I'm not sure how to proceed. His lease is up March 31st and I know (I think) that I have to give him 60 days notice of me not renewing, which means I need to decide in the next week. I'm starting to think the extra $100 a month isn't worth the stress of waiting for rent towards the end of the month.

What are your thoughts? Have you experienced something like this? Thank you in advance!

Joel Owens · Answer

You can download the GA tenant guide free here as a .pdf

http://www.dca.ga.gov/housing/HousingDevelopment/programs/LandlordTenantHandbook.asp

The way it generally works is you give them a 3 day notice to vacate and rent Is due. Then you go file at the clerks office for that county. You pay for an additional notice to include "and all others" so that any unknown people not on the lease will be thrown out as well by the Marshall.

You pay the fees and the letters are mailed out to the tenants mailing address and the Marshall tries to personally knock on the door and serve the tenant and have them sign receiving notice. Usually about 7 days or so is given to file a response with the court and then a hearing date is set. If the tenant is not personally served by the Marshall or they do not file an answer then you WILL NOT be granted a judgment by the court just the eviction order. To get a judgment then you will need to take them to small claims court and win the judgment there. Collecting on that judgment is a different story entirely. Sometimes you never collect as they are judgment proof or do a chapter 7 BK down the road. Other times if you can collect it can take years.

When you get eviction granted by the court then you pay the writ fee. At that point your file is transferred to dispossessory for the Marshalls to serve. They call you with a time to be out there. They prefer you have a eviction crew there at least 2 to 3 people because they do not want to be there for more than 30 to 45 minutes as they have other evictions to serve. They do not care about trash in the unit but only removing the tenants belongings. You can do the trash and conditioning later. The Marshall does not tell the tenant when they will come out. This gives you leverage to get the tenant out way before the Marshal comes you just show them the writ slip and the eviction is imminent from the Marshall. They will worry about stuff thrown on the street when not home and 90 percent will move way before then. If the eviction falls on a rainy day the Marshall will usually reschedule the eviction.

Timeline for the whole process can take 3 to 4 weeks or 3 months like if in Fulton county and they have limited Marshalls and sometimes thousands of writs to serve a month.

No legal advice.

Ibrahim Hughes · Answer

William unless you have a mortgage co. that will allow you to send in the mortgage payment minus his rent along with an excuse and a promise to pay I would start eviction. Perhaps the start of an eviction will force him to a) leave on his own, b) get a steady job or c) run his business more efficiently so that he can pay his bills on time.

And Something tells me that while you have yet to get your money, his cigarette pusher is getting his. As your tenant stated, ''business is business''.

Azeez K. · Answer

@William Edmondson Firstly congratulations on your first investment. The tenant's got to go. Try to keep yourself out of tenant sob stories as you are currently running a business where you need to be focussed on cash flow and building equity so you can rinse and repeat the process over and over again.

All the best

Dawn Anastasi · Answer

Talk to him and tell him what you told us, that "business is business" and you just cannot take non-consistent payments. You're giving him advance notice so he has the opportunity to find another place with maybe cheaper rent.

Joel Owens · Answer

Yes I had 20 units ( 5 quads ) at one point. Got rid of them due to the time and headache it was causing me.

I can't speak for DeKalb as my property was in Fulton (Roswell, GA).

3 day notice you can do yourself. Filing at the office was 78.50 and then another 8 dollars or so for the all others so about a 100 bucks. The writ was 20 bucks after being granted eviction. The eviction crew there professional companies on the Marshalls list of 8 to 10 people that do it fast but they will cost a few hundred a pop so better to get the tenants out ahead of time. You can just recruit a handyman and some workers for cheap to save money. They will not be insured of course etc. like the eviction crew should be. Best thing to do is get an inspection of your unit with the tenant there. Look upstairs, downstairs, closets etc. to see how much junk you will have to move.

One tenant I made the mistake of not inspecting upstairs and the down stairs didn't have much in it. The day we evicted with the crew she had a ton of crap upstairs almost wall to wall.

So on the low side you could spend 150 to 200 for filing, writ, and eviction crew but also by waiting until the day Marshall throws them out you could lose one to two months rent. You have to weigh how much rehab will this unit take to get rent ready again plus does the timing work out better if you get them out now versus using a service or attorney etc.

There are usually eviction companies cheaper than attorneys that handle the filing process and emptying of units. If you get attorneys and eviction crews involved expect to maybe pay 500 or more with filing fees. You can go to the courts and watch for yourself during eviction hearings arguments from both sides. Some landlords will offer "cash for keys" if the tenant goes ahead and vacates the property signing a document they are willfully leaving and breaking the lease. This gets them out ahead of time and lets you re-rent quicker.

No legal advice.

William Edmondson · Answer

Joel and Ibrahim,

Very good points, at the very least I am not going to renew his lease and he will need to move at the end of March. I just cant run an efficient business with him paying (read non-paying) like he is.

I will need to figure out what the process for eviction is in GA. I have read that I need to have a "Pay or Quit" served and then a Dispossessory writ served and then the court makes a judgement and then 7 days later I can evict, but I think I may just pay an experienced lawyer to do it the first time so I don't do something illegal on accident.

James Wise · Answer

He gots ta go

William Edmondson · Answer

Dawn and Joel,

Thank you for the excellent advice. I'll just have to be stern. I sent him a message telling him that I would not be renewing his lease and that I will be giving him a pay or quit notice if I do not have the rent + late fees in full by this Friday. I called the DeKalb Magistrate court clerk and he explained the process to me and it's exactly like Joel explained. Thanks again!

William Edmondson · Answer

Thanks Joel, it sounds like unfortunately you have had to do this a few times in the past. Do you know what the costs usually run (ballpark)? I live in the Stone Mountain area which is in DeKalb county.

Inherited problem tenant with first investment property, what should I do?

Inherited problem tenant with first investment property, what should I do?

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