Troublesome tenant very behind on rent, claiming to be getting a loan to repay

[Ryan Curtis]

Hey all!

First post here but have been lurking for a while. I purchased a fully renovated, turnkey triplex at the beginning of June and it's my first and only property so far. I inherited a 1 BR with a great tenant who is always timely with payments, a vacant 2 bedroom which I converted to a furnished 1 BR with a lounge/TV room and rent to business travelers for MTR's, and a 3 BR with tenants in place which is the source of my problems lately.

Before I closed, Unit 3 had made all their payments - albeit occasionally slightly late. They are now behind 4 months on rent even with an eviction notice and my management company and I being on their case. They claim to be going through hardships and have told me that they're trying to take out a loan on their retirement account to repay all of the rent. This is backed by screenshots of email correspondence with her retirement company but it has been at least a month and a half of back and forth to hear back about this loan and still no payments.

Their lease is up end of November and I have a double security deposit for them so I assume the owner deemed them a risky tenant when letting them move in. My management company is suggesting I don't renew the lease (of course) and ALSO file for eviction. They're saying it might take a few months to fill this unit with a good tenant in the current marketplace in that area, which I'm not surprised about considering it'll be near the holidays and the area isn't the best for good tenants plus the building is very nice for the area.

My questions are:
1.) Is filing for eviction and also not renewing their lease a good move? I'm worried about the eviction expenses but I understand that if they've been this troublesome, the extra incentive to get them out seems like it makes sense
2.) When I get them out and assuming they still haven't caught up on rent, can I claim their whole security deposit to recoup these losses? Is there a risk there?
3.) My 2nd unit has done pretty well as a 1 BR furnished MTR (only 4 months of experience so far though) and I'm wondering if it makes sense to convert this 3 BR to an additional 2 or 3 bedroom furnished MTR rather than trying to do a long term rental? Obviously more expenses to furnish but seems like it might break even in the short term and benefit more in the long run anyway if it sits vacant for months waiting for a high quality, long term tenant. Plus the costs for my management company moving in a new tenant are fairly lofty, as well.

What do you think? Thank you so much for the help!

[Nathan Gesner]

My first thought is that I am concerned you are asking these questions of strangers on the internet when you have a property manager that is supposed to be handling things for you. A good property manager will lead the way by explaining to you exactly what their plan is for getting the property back on track. It sounds to me like your PM is doing the bare minimum, maybe hoping the problem goes away.

I would not believe your tenants claims about getting a loan and I would not delete eviction. Make it clear to them that you will evict, you will seek a judgment for every dime owed, and if they do not pay then you will send them to collections. Then follow through.