Rent Default Rates For Landlords

[Malte Lange]

Hello Bigger Pockets community,

I'm very interested in rental properties, spanning both more traditional rental properties, but also low-income housing properties. I did my best to find a thread with this information, but couldn't find anything. Should a thread already exist for this, please feel free to just forward me. Thanks!

I'm wondering what sort of rent default rates people work with or have heard others work with? By rent default rate, I mean number of months defaulted over the total number of months rented out. So if you have a property that you rented out for 12 months and then your tenant didn't pay rent for a month or two and then you had to evict them, the default rate would be 1/13 or 2/14 depending on the circumstance. You can either state this for a single property or aggregated over all of your properties or what you've heard from others. And please specify if this is for non-low-income or low-income properties.

I know this information can be personal, so I appreciate any input! Thank you!

Best,

Malte

[Bettina F.]

0%, at least for 2016 and so far for 2017.  We have a 6 unit apartment building, and we re-homed the slow/no payers when we bought the building in 2014.  During the rental agreement signing, I have a little speech that I give applicants where I tell them that we do not tolerate late rent.  We only do month to month agreements, can get a tenant out with 15 days notice in my state.  The security deposit covers the last month's rent.  Rents are due on the 5th, 3 day pay or quit notices are posted on the 6th of the month.  We had 2 instances of late rent this year -- both tenants told us ahead of time, have a multi year history of on-time payment, and were going to be late on rent due to job change.  Both paid on the 6th as I recall.

Giving the slow/no payers their 30 day notice to vacate really shaped up the whole building.  It is all about setting expectations and enforcing consequences.  I rent Class B, blue collar units. No section 8.

8.