Does the "behind on rent" scenario ever end well?

Question

Over the years we have had one eviction and a few situations where the tenant left after falling behind on rent. It looks like we have another eviction in the making with long term tenants. In all of these instances, the tenants experienced some type of traumatic event like a job loss, serious health issue or divorce -- things that the best tenant screening cannot catch. In some of these cases, we have tried to "work" with the tenant until they were able to get back on their feet. Our experience has been that this never works as the tenant is never able to get back on their feet while living in our property. We of course hope that we are helping the tenant out in this difficult situation, but it seems questionable as to whether this actually helps and only delays the inevitable.

Have you had an experience where you worked out something with the tenant to help them stay in the property, and it actually turned out positive for everyone? Do you find that this never works?

Derek W. · Answer

it rarely works out well in the long run, but like @Bryan L. Said, sometimes when they get tax returns, or a settlement at work for workers comp they catch up. It's a different mind set, and sometimes you have to play in their backyard. I've been known to get a dirt bike, or a cell phone or free tatoos in lieu of back rent. I have an elderly handicapped lady who has rented from me for 12 years and is into me for over $10,000 by missing a little here and there. I've finally accepted that she is my tithing and I'm happier sleeping guilt free than being a little richer.

Scott C. · Answer

We have owned a 19 unit apartment complex for almost 8 years and in that time we have had 3 evictions, 2 leave after a "pay or quit" notice and 1 very surprising situation. This one tenant, who had always paid on time, called me and ask me to stop by his apartment. When I met with him he explained that he developed a serious medical issue and was going to be late with his rent. He showed me all of his medical bills, showed where he had cancelled his cell phone and cable tv. The surprising part was the 2 commitment letters he had from the local VFW and American Legion, stating that, combined they were going to cover about 1/2 of his monthly rent for the next six months. He also showed me that had contacted several other not-for-profit organizations for help as well as applying for SSDI because he was not able to return to work. Before I agreed to anything I verify everything that I could and then allowed him to stay. It took 8 months before his SSDI was approved and when he received his first check he paid me the full amount owed. I know this is a unique individual and definitely not how other tenants have dealt similar situations. He was proactive in trying to solve his problem and I will probably never see it again.

Rob K. · Answer

I once had a tenant in a house in a sketchy neighborhood where the rent was only $525. She got paid weekly (weakly) and pretty much scraped by, but always paid. One day, I received a letter by snail mail detailing how she had gotten surgery and she gave a sob story about how she wouldn't be able to work for six weeks and therefore, couldn't pay me for two months, but would then get caught up when back to work. She detailed how much she would pay on which dates and had a written plan to be current.Since she had been such a great tenant, I decided to gamble. If I filed for eviction immediately, I figured it would take a month to get her out and another month to clean it up and re-rent it. She ended up paying me as agreed and was a great tenant.This was rare. I've been burned many times trying to work with people to avoid an eviction.

Bryan L. · Answer

I have had some who get caught up when their income tax refund comes in - usually around Feb or March. Actually, I have two that are behind right now and I expect them to catch up with income tax refund money (they are behind, but are paying).But, on the other hand, it seems that many people have one of those life events that the OP mentioned. And it usually seems to me that these people will rarely get caught up in a reasonable amount of time. Working with them just seems to drag it out.

Vicki Gleitz · Answer

I am not actually an investor. I am trying to help out my son. We do, however rent out our home and live in a travel trailer in the mountains. [ I sit on the deck every morning with my cup of coffee as I "visit" with the deer.We have had 2 sets of tenants. The first family moved in 3 weeks after I had a double mastectomy. They actually sent in cleaners, at their own expense, because they did not want me to hurt myself [ no, we did not know them beforehand] and then they raised the rent by $50 a month because they said we were charging too little. Before they moved [bought a house] they found our new tenants for us. They are also wonderful people. The woman is stay-at-home, with 4 little ones and the man works. He lost his job about 2 years ago. He found another one, but got 2 months behind in rent. After he got a new job we sat down with him and figured out a payment plan and they were caught up within a year.So, we are not investors, but we do rent out our home, and that is what we did. First we asked ourselves what we would want if we were in such a difficult situation. Kicking us out would not have helped us out, so how would it have helped our renters? Of course, this is coming from an Autistic families' perspective, and we perceive the world in slightly different ways than non-Autistic people tend to[understatement]

Aly W. · Answer

I know exactly how you feel. It's a difficult thing when a long term (good) tenant has a serious setback. If it's temporary, and they can find another job - usually the issue - reasonably soon, it's worth trying to work with them. But how do you define "reasonably soon?"We have a decent tenant, with kids, that has fallen a few weeks behind. She's been late before, but always paid the late fees. She's also long term, in a property that is challenging to rent. We are working with her, because an eviction would require a renovation that we aren't up for now, plus the vacancy time, and the fact that the property would be a target if it were empty. It's in a Class C/D area. This tenant has a job, and she claimed that a change in pay schedule is what caused this. She had had an eviction filed by her previous landlord several years ago, after she lost the job she had at the time. He told me he worked with her for at least 6 months, taking whatever she could pay, but she was unable to find a job and wouldn't leave until they had a court date. That landlord told me that until she lost her job, she was a good tenant. I've found that to be true in her tenancy with us, so we haven't taken too hard a line yet. That being said, if she lost her job, it's clear she would never be able to catch up. I'm considering asking her to request assistance from her church to get her caught up now, as she's very active there, and maybe your tenants can explore other social services for help? We had a tenant a few years ago that fell behind and we filed for eviction. She got legal aid, and literally the day before our court date, she got social service assistance to pay everything she owed. That kept her in the property until the next year, when she started to fall behind again. This time, there was no reprieve - we filed the Pay or Quit and she actually left when she was supposed to.Is your property easily re-rentable?

Bill Gulley · Answer

Workouts can be done when the arrears is less than a month's rent, owing a half month's rent can be caught up if you work together. Seems when it's a month plus behind, it usually turns out badly enough, where you may lessen the amount owed but they usually don't get caught up, as I recall, by the 3rd month of catch up, they try to leave reducing the rent obligation. An old saying in lending, you can't make a bad loan go good, pretty true but not always. The catching up must be affordable, reasonable and most of all agreed to by a motivated tenant. :)

Chris Gilbert · Answer

Bill Gulley Your experience and the other replies make me think we need to be more discriminating about how we approach each situation. It sounds like you did a great job of actually working it through.