Poll: Garnished Wages from Evicted Tenants. Any Success Stories?
Joshua D.Pro Member
BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votesI was just reading a thread about someone having to evict a deadbeat tenant and was curious to get some info from all our landlords on the site.
Of the tenants you've recently evicted, what percentage of you have been able to recover owed monies?
Additionally, has garnishment worked for you?
I'm just trying to get a feel for what is happening out there right now.
Thanks.
[.....Does it take you a long time to fill your vacancies, PNW?...]]]]
It didn't used to. I only buy properties that have some desirable feature and I keep them in peak condition. I also try to have the best place in it's price band when I decide on the rent amount
This past 2 years it has taken longer to find a decent tenant. But I maintain it is cheaper to keep a vacant unit than it is to evict a destructive deadbeat and pay for all the damage they do.
Over the decades, year by year, the quality of tenants goes down. When I started in the business, my old tenant would move out one day and the new tenant would move in the next.
Then I had to change and only start to show a unit after it was vacant, because it wasn't possible to guess how much cleaning and repair I would need to do. Plus, with the scum that is out looking for a place now, I don't want to take them into my good tenant's home to see the tenant's stuff.
Still, I would clean and advertise and have my new tenant within a couple of days.
The past two years have been hit and miss. The last vacancy was filled before the old tenant's rent was used up. It rented to the first applicant
I have a vacancy right now that my phone calls are from people like 2 unmarried couples that want to share a house (no thanks), or a person that gets real disrespectful when I tell them I check credit (rejected for attitude if not bad credit). I am resigned to taking some time to fill that one.
I have seen where tenants have done $15,000 in damage. Add that to a couple of months of no rent to get them evicted, and I'd rather have my units empty than to rent to a deadbeat loser.
I used to lose my tenants when they bought a house. Now I lose my tenants when they lose their job.
I've never collected a penny that wasn't covered by the deposit.
I've never had to evict (touch wood), because I screen hard. However, I have had to ask tenants to leave when they have had a major life change like job loss, divorce, new live-in friend who turns out to be a loser.
If you have to evict, normally it is because they no longer have any money. If they don't have any money, you won't collect.
Tenant mentality says that if your wages get garnished, you simply quit your job. They quit and then you have to find them again before you can file for garnishment again. Then they just quit the new job.
If the tenant had a really good paying job, too good to quit, you wouldn't have been evicting them because they weren't paying.
Maybe if you evicted over a non-money issue and the tenant had a good job you might be able to collect what was owed.
In 30 years of landlording, I can count the tenants who left owing me money on the fingers of one hand, so my collection experience is rather limited. Every time it happened, I tightened up my criteria and toughened up my screening. If I learned something that stopped it from happening again, it was a cheap lesson.
Hi, I have collected a couple garnishments in the past. I know of a landlord that attempted to collect this way and they received one payment. Payments are based on % of earnings, so it's not like you get your money in two checks!
What happens is the loser either quits, since they are not going to work there for half of a check or they get fired and draw unemployment that can't be touched. While it's illegal for an employer to fire someone because they have a garnsihment, accounting and disbursing required by the employer is a real pain and if the employee is not an outstanding person, they employer usually finds another reason to let them go. Now what outstanding person would have a judgment for non-payment of rents? So, when your favorite tenant takes off and finds another job, you have to find out where they went and start the process again. Bill
I would think that most people who don't pay their rent, either don't have a job or lost their job. Last time I was a renter was back in 1986 and rent was my biggest concern, so my first paycheck was going to rent and everything else took a back seat.
If someone has a steady job and cannot make enough for rent, he/she should be qualified to housing assistance.
I evicted a tenant last year who was on rental assistance. He was terminated from the program, caught collecting disability in addition to rental assistance.
He at first agreed to vacate the property if he couldn't get emergency assistance that first week the rent was due. Never happened. He was evicted, I took him to small claims court for everything he owed (water/sewer bill, damages, legal fees), he didn't show up, I won the judgment and was told by the court clerk that disability can't be garnished.
I didn't bother going any further. The next landlord that checks his credit will see the eviction and judgment, and hopefully avoid the deadbeat.
I don't think you can do it if the parents have their property in a trust... can you?
Josh,
I've literally evicted dozens of people over the past 7 years. I only sue people for damage if it is significantly in excess of the security deposit AND if they have a good job. I have acquired several judgments during this time and HAVE NOT COLLECTED A PENNY. In every case, when the I garnished their wages, the scumbag immediately quit. The last one was THE STORE MANAGER at a major retail store. She quit and moved out of state.
Back when I had rentals, in TX almost ANYTHING the owner possessed was covered by state law to prevent the landlord from attaching it. Wage garnisheement was a non-starter too.
I always made sure that my security deposit EXCEEDED a month's rent so the tenant didn't think that "I'm leaving at the end of the month so just keep my deposit" would fly. By staying on top of the rent collection I was always able to minimize lost rent so the deposit would cover any damages.
On those rare occassions that damages exceeded my deposit I would send a statement of the debt, a letter stating I was willing to FORGIVE THE DEBT, and a 1099 (income statement) for the forgiven debt. Sometimes this resulted in earnest attempts to make good on the debt since these guys usually didn't want any more attention from the IRS.
A couple of times tenants left enough stuff that I was able to yard sale myself back to whole.
Frank
[.....Does it take you a long time to fill your vacancies, PNW?...]]]]
It didn't used to. I only buy properties that have some desirable feature and I keep them in peak condition. I also try to have the best place in it's price band when I decide on the rent amount
This past 2 years it has taken longer to find a decent tenant. But I maintain it is cheaper to keep a vacant unit than it is to evict a destructive deadbeat and pay for all the damage they do.
Over the decades, year by year, the quality of tenants goes down. When I started in the business, my old tenant would move out one day and the new tenant would move in the next.
Then I had to change and only start to show a unit after it was vacant, because it wasn't possible to guess how much cleaning and repair I would need to do. Plus, with the scum that is out looking for a place now, I don't want to take them into my good tenant's home to see the tenant's stuff.
Still, I would clean and advertise and have my new tenant within a couple of days.
The past two years have been hit and miss. The last vacancy was filled before the old tenant's rent was used up. It rented to the first applicant
I have a vacancy right now that my phone calls are from people like 2 unmarried couples that want to share a house (no thanks), or a person that gets real disrespectful when I tell them I check credit (rejected for attitude if not bad credit). I am resigned to taking some time to fill that one.
I have seen where tenants have done $15,000 in damage. Add that to a couple of months of no rent to get them evicted, and I'd rather have my units empty than to rent to a deadbeat loser.
I used to lose my tenants when they bought a house. Now I lose my tenants when they lose their job.
I've won a few judgments over the years, but never collected. Tenants go missing when you try to collect.
Did you know that a person can appeal a judgment in small claims court? I won $5,200 in small claims (Bad check, treble damages, plus attorney fees), the guy who lost the case (I'd love to call him out if anyone wants to know who not to work with) decided to appeal and counter sue for $60,000. The case was dropped when I didn't want to put out thousands of dollars to go to the Indiana supreme court.
Anyway, just throwing that out there, I had no idea.
A very expensive lesson to learn the hard way.
How many people have called or come to see the unit? If you're not getting a lot of calls, that's one problem. A lot of people coming to see the property and not wanting it is another.
I've gotten a fair amount of calls. I've shown the house to about ten groups of people so far.
The house is in good condition. I let them look through the house at their own pace, I don't hover over them or rush them.
I've had a number of people seem sincerely interested in the house, but then they disappear. They're usually the ones who have credit problems. I tell them that I can work with them on foreclosure, medical bills, etc., but they still don't want to apply and pay the application fee ($25 per adult). I guess I could charge no app fee at all, but then I'm afraid of attracting a lot of unqualified people and having to absorb the cost of their screen completely by myself.
Hi Bienes,
In my area, most landlords don't charge an application fee. I don't either. My experience is that most tenants don't fill out the application completely anyway, and my app says that incomplete applications won't be considered. It also says I have the right to run a credit check. So if they don't fill it it out completely, I don't bother doing a credit check if it looks sketchy.
For the rare few that are complete (and they are RARE!), if the application looks good and I can check most of the their references on the phone, then I would just absorb the cost of the credit check.
I've had applicants ask if I am going to run a credit check. I simply ask them if there's anything they want to tell me up front. My current tenant (who replaced the one who was evicted), told me that she had an eviction from her last apartment. Since she was now getting full rental assistance, I wasn't too worried about the rent but I wanted her former landlord's input. The landlord confirmed she kept the unit clean and caused no trouble, aside from not paying her portion of the rent towards the end, so I took the chance.
Even if you have to run a few credit checks at $25 each, the cost is tax deductible and there likely won't be many.It gives you a competitive edge in the rental market to advertise no application fee. Or as someone else here suggested, offer to credit it back towards their first month's rent.
>>I don't think you can do it if the parents have their property in a trust... can you?<<
Eddie -- GOOD GRIEF!!! Is that what's going on outside of NC? If so I'll have to adapt but so far all my tenants' parents haven't gone to that extreme. Sheesh.....
In your college rentals, I'm assuming you have a bunch of unrelated tenants all on the same lease? What happens if say 1 of 4 doesn't pay his portion? How would you handle that type of situation?
Keep the Application Fee!
You are right, a lot of people are going through credit and financial problems and it has to be embarrassing, but you can use this to your advantage.
If you are willing to accept bad credit if they have the work history and income, explain this in detail, up front, but do it passively. This information needs to be more matter of fact instead of the old sales pitch “ Look…if you’re having a problem we will work it outâ€. People don’t usually believe the direct verbal nearly as much as the passively written.
Place a flyer in a cheap stand on the kitchen countert explaining that you are aware of the current economic times and you are willing to accept A, B, C as long as D, E are covered.
And if other landlords in your area are not using the same approach it makes you look great. Now when potential tenants come to see you they have to weigh their options.
a) Submit an application to the landlord that states up front that he/she will accept their flaws
Or
b) Go and try to find another house (that they like) and hope the landlord will be as lenient.
You will win over the other landlord almost always.....Appliation fee or not.
I'm finding that what people are doing in this area to entice renters is to do NO credit check at all. I'm still a bit leery of going that route though.
The ironic thing is that there is a ton of rental inventory out there right now, especially in the apartment complexes, but at the same time there are all these financially unqualified people trying to rent.
I'm coming to the conclusion that it just takes a while to rent something in this area right now.
I hate having to keep it vacant and pay for the builder's risk insurance policy, but I'd rather do that than panic and rent to someone who could be trouble.
When a tenant was ready to move out, the rule was that he/she needed to find his/her own replacement.
This one girl held a large open house to pick her replacement. But one of the attendees was from her alma mater, so she spent most of the evening chatting with him. Of course, she offered him the room. But then he changed his mind and didn't move in. Sadly, because she had been so enrapt by his presence during the open house, she had forgotten to get the names of the other attendees. Thus, no one took her place and everyone was pissed because her share of the rent was passed on the other members of the house. :roll:
Bienes,
Don't know if you've mentioned it, but how competitive is your asking rent for the house's condition and neighborhood?
Angie