Landlords will pay tenants to leave

[Gregory B.]

After reading through these forums I've realized that the difference between how people approach real estate is Day and night. I'm in NY, more specifically NYC, and see advice given that is down right shocking on how to approach LT issues. In NYC decisions are made based on business/economic terms, rather then the emotion of many on these forums. I tend to see a lot of responses to question on here stating that people need to act like a business, but then proceed to tell people that they need to show the tenants who's boss and how they are being taken advantage of instead of weighing the economics from every angle. Maybe the market isn't saturated with tenants and it will take 6 months to relent the premises plus turnover costs, so evicting a recidivist last payer is not the right option? But, I will constantly see situations on here where people on these forums demean others about being taken advantage of by the tenant and how they need to show them you are a business and won't be taken advantage of. Or, they strive to make a black mark on the renters history no matter how little the breach is. These answers show that they are not thinking with a clear business mind. With that said do you think that all rentas should be managed by a third party who is not emotionally connected to the property? And in reference to the title of this post, with half of all rentals in NYC being rent regulated, it is common for LL's to Buyout tenants who are defaulting on the lease or breaking the law. Now the business purpose behind this is the LL then can take certain increases in rent and in the right circumstances deregulate the apartment. LLs will pay anywhere from several thousand dollars and free rent to millions for apartments to do this. I feel like many LLs will be shocked to find this out and would refuse just based on many of the responses on this forum, even if that is the correct economic decision to make. What are your thoughts? Pardon my ramble and typos, this was written on my phone.

[Mike Cumbie]

@Gregory B.

I don't blame landlords for using the "Cash for keys" option. Especially if it is in a rent controlled area. That option is a tool in the toolbox. Generally I only recommend it when someone has an inherited tenant, but rent control where you could increase would certinaly be another time it worked well. The ones I disagree with are the ones who use it as a first option choice.... always. You see it on the forums all the time "My tenant is 9 minutes late on rent what should I do"?..... There is always a post "Cash for keys get them out now". Which to me is silly.

[Gail K.]

I have never done a "Cash for keys" option but in my county it is inexpensive to file for a dispossessory affidavit (our version of an eviction).  If done relatively soon after rent is not paid the entire process generally takes about a month (longer if the tenant disputes the filing and a court hearing needs to be set up OR the Marshall's Service is backed up with other evictions).

Georgia does tend to be a landlord friendly state.

In other states the process is much longer, more expensive, more frustrating for the landlord/management.   Depressingly this can drag on for months at a time.   Tenants who "know the game" (so to speak) can often manage to live rent free for a significant amount of time on the landlords dime.

In those states I can see the point of simply paying such folks to go away.   Each landlord would have to weigh the cost of filing for an eviction plus lost rent plus, perhaps, a concern over any "revenge" damages a tenant may cause during the process versus forking over money to get them the heck out of the rental property.

Gail

[Thomas S.]

I have never bribed a bad tenant or paid extortion money to a tenant. In my jurisdiction there are procedures to be followed regarding dealing with getting rid of tenants and I prefer to follow the proper procedures.

There is no room for emotion in business. Paying extortion money in my personal opinion is a emotional as opposed to a business decision but I will openly acknowledge that in some markets extortion may well be standard business practice. Obviously in those markets business is business and emotions are not a factor.  

Bottom line you do what your market dictates. 

Understand that those same tenants will simply move from one landlord to the next expecting to wash rinse and repeat their extortion tactics. This is why extortion is standard business practice. Landlords have created and adopted the policy.

[Walt Dockery]

NYC is the standard on how landlords should operate?  I've heard countless horror stories from renters in NYC about how landlords operate up there, that landlords can get away with it I imagine is largely due to immoral government overreach distorting the free market. No thanks. 

[Bettina F.]

I am surprised at how often the "cash for keys" option comes up on the Bigger Pockets board.  It appears some posters view it as the first option.   We have never had to resort to this, or ever continue to a full eviction.  We have had to "rehome" most of our inherited tenants -- 5 in the past 3 years.  By taking a confident, strong stance, following our state laws and posting legal notices as prescribed by law, tenants have left.  I have had to frankly let a couple of tenants know what the consequences are of an eviction, and how it will ruin their credit and their rental history for years to come, and incur the legal costs when they lose their case. We have a "no-back down" policy -- if we hire an attorney we proceed to court.  Eventually they have all seen the light and left peacefully when their 30 days were up.   Because we are quick to post the Pay or Quit, I haven't even lost rent on these "re-homings,  as we use the SD for the last month's rent.   Most tenants are broke, ignorant and scared.  I have resources, knowledge, confidence and experience.  Everything we do is 100% legal.

[Patrick M.]

NYC cannot be extrapolated to anywhere else. In NYC tenants have brokers finding them apartments- who they are paying! Wow- I could only dream.

The bottom line is you must have set rules in and out of a lease and when those rules are not being followed you must address it immediately and with conviction.

I will tell you right now- my ex tenant thinks I am a big jerk-head because I did not allow her daughter, grand-daughter and baby daddy move in with her. Another ex tenant thought I was a no good because I provided a notice to cease and then quit when the broken down car was not removed from the driveway. Are you seeing a pattern? I did not feign interest in what her daughter's situation was, I was not concerned with the reason a broken down car was still on my property- I wanted it gone and it was going to be removed. I am the landlord, I don't want any tenant friends. I am respectful and kind, but I do not suffer tenants who seek to take advantage of me or my buildings. And the renters I want and get appreciate that.

Likewise, if there is a problem I respond immediately and handle it as a dedicated landlord should. I don't call them up and say " hey bud remember when you had that Kegger and I lacked the balls to enforce the rules and everyone in the building was pissed- yeah, well can you cut me some slack on fixing the leaking sink?"

I would have paid the 5 different tenants cash to get rid of them when I took over the buildings. But you know what- I implemented my rules and stuck to them and addressed them each and every time they were broken with a notice to cease and or quit. I papered them to death and eventually- in short order they all left... why?

Because I am a big jerk face landlord, that's why!

[Bettina F.]

Originally posted by @Patrick M.:

I would have paid the 5 different tenants cash to get rid of them when I took over the buildings. But you know what- I implemented my rules and stuck to them and addressed them each and every time they were broken with a notice to cease and or quit. I papered them to death and eventually- in short order they all left... why?

Because I am a big jerk face landlord, that's why!

Can I upvote twice?

[Donna Talley]

• We are currently in a situation where we have sent a Notice to Pay or Quit. We gave them ten days to pay, which today is the due by day. Then we gave them 30 days to move out if they didn't pay. We considered the Cash for Keys options...however; I feel as though Cash for Keys is enabling them. 
• I must admit I am nervous about the eviction process but I believe they need to realize the damage being done by not paying rent.