Evict Tenant Over $75?

[Mark S.]

I have two (soon to be three) turnkey SFRs in Memphis, TN. My first house has great tenants who always pay on time, make 5x the monthly rent, etc. Dual income, two small children. My second house has a single mother, more like 3x monthly rent, one income She has been renting from this TK provider for two years and has supposedly never been late. When another investor sold the house she was previously living in, they moved her into my newly purchased house at the time. For the first couple months, she paid on time and in full. For the last couple months, she‘s been consistently coming up short. First $32, then $144, then caught up, now $74, etc. I have been emailing and spoke with the TK provider over the phone to try to get a better sense of what‘s going on and to explore options. They tell me she gets daily emails/weekly phone calls about the shortages and they‘re doing everything they can to collect. They were not able to provide details as to WHY she‘s late (and even if they could, it could be made up anyway by the tenant). They assured me she is being charged late fees, but when she makes a payment all of it goes toward unpaid rent first, late fees last. The PM agreement allows them to keep late fees as part of their compensation for collections and I‘m fine with that. The question is whether or not it makes sense to start the eviction process. From a personal standpoint, I don‘t want to evict someone over “only $74,“ but I realize it can be a slippery slope and I don‘t want that to turn into $740. From a financial standpoint, if I start the eviction process now, it will cost me more than what‘s owed (assuming that balance doesn‘t grow). It will also likely leave me with a vacant house in the winter which will probably be difficult to fill. Her lease is up at the end of March. I‘m thinking of continuing to monitor the balancd closely (I requested the PM provide weekly updates on the outstanding balance, which they have) and as long as it doesn‘t grow too much, give her a chance to get caught up. If this continues every month, maybe just not renew her lease in the spring (as it will be much easier to move someone in that time of year). That way, she‘s not evicted in winter and I‘m not stuck with an empty house. What do you guys think?

[Andrew B.]

your issue is not one of money, its one of priorities. your tenant no longer prioritizes rent, because you have allowed your agent to deliver the message that rent does not need to come first. when the tenant knows her roof is on the line, she will let other bills fall to the side in favor of rent.  inform your management company that they should not be accepting partial rent. if rent is not paid, they deliver a 5 day notice to pay or vacate and then begin eviction.

if you want to be nice, you can offer to let her out of the lease now so you can get  a new tenant in before winter starts.