For the last 4 months, I had at least one vacancy per month. With each vacancy, it takes about 2 weeks to get it fixed, cleaned and ready to rent again. I spend the last 2 weeks of the month finding a tenant and then moving them in. Of the past 3 vacancies (now with paying tenants) each has cost me in the neighborhood of $2,000.00 at turnover.

Since November 3rd, my rehab crew (and I) have been working daily on vacancy #4. This one will cost me $7,000.00 since I am having Central Heat /Air and new vinyl windows installed also (I had no choice, I had to do it).

Right now, I having to borrow money to keep this constant vacancy/rehab train rolling. At times, I think the 'powers that be' are testing me to see just how tough I am in this business.

Now to add some salt to my wounds, I have one tenant that did not pay rent this month and now I am faced with a dilemma of whether to file eviction now (another vacancy) OR just let them live there for free until I can get my current (#4) vacancy rented out.

Ken (NY)

Not sure what is happening but it could be the colder weather arriving and people are bailing out before they have to pay heat again. Are the heaters producing enough heat at your places? I see that your are in AL.

Also the economy is ticking up and people are moving to get better jobs. Relatives calling and saying that there company has work and come on up to their state.

Big change makes a lot of small changes happen. Finish the one you are working on but explain to the nonpaying tenant that an eviction will ruin whatever credit they have and how much can they pay you NOW.

Just maybe, there is some Rocket Science (needed) here.

A whole bunch of Sharp Pencils, too.

There are a lot of Spokes in the Wheels,

being a Successful REI / Landlord. (Long term, that is)

Constant Adjustments, Improvements and Techniques.

People, Policies and Procedures.

You hold all the cards and you make all of the decisions.

There is No Magic Pill. ( But you know that)

File right away. It will take time to get them out. By the time they are out, you'll be done with the rehab.

Roy, two things come to mind;

If you can't pay you can't stay.

When in doubt chuck them out.

Is the $2000 just to paint and clean, or are you doing more substantial improvements?

Yes, you're being tested. Once you pass,

You can handle more.

I remember when I was starting out, I was in an attic sistering rafters that were fine with extra supports in a 150 year old house because the picky buyer didn't think they would support snow load. All this at the same time I was losing the partner on the deal to his own vices.

I remember being in the attic, sweating in August just screaming at God, trying to figure out why this was happening to me.

I survived. It would be handled differently today.

WMH,

The non-paying tenant has been with me for 1.5 years. During the first year, they paid on the 1st. In the last 6 months, they have been chronic late payers,...but they eventually pay by the 15th. I did post the 7-day P/Q notice 1 week ago and yesterday was their final day.

Due to the way the district court system here works and the Constable's schedule, I have learned the best day to file an eviction is always on Monday at 8:30a.m. Even though I could file today, it would be in my best interest to wait until next Monday. So, if they pay before then, they will be off the hook and I will be spared another vacancy. If not, I will drop the hammer on Monday morning. Once I file, assuming no complications, I can have them out by the first week in December. Then the winter rental doldrums come. Dec/January are the worse months here to have a vacancy.

You know the answer already Roy...you just need us to confirm it for you. File. Today. Every day lost can be calculated as follows: (month's rent / 30).

Add that cost to your $2,000 which will be spent regardless of whether you evict now or wait 3 months.

Btw, a $2,000 turnover on a normal, non-evicted tenant seems high based on my experience. Can you provide details as to what you are doing/what is your move-out process like?

The damage that a non paying tenant can do is more than having a vacancy. A vacant unit can not damage itself. Evict the non paying tenant he's no benefit to you at this point in time.

Rathdrum (ID)

Yes, I am doing some improvements in each vacancy that really needs to be done. 2 vacancies ago, I had to replace the lower kitchen cabinets and counter-tops due to being just worn out beyond repair. In another vacancy, I had 400 sq. ft of Allure laid and new (cheap) carpet for the bedrooms.

The vacancy I am working now (#4) had to have a new 200 amp breaker box installed before I could get Central Heat and Air put in. The existing breaker box had serious corrosion on the two 120 amp power legs that attach to main bus panel. Plus, there was no extra room (breaker slot) on that main bus panel to add another 30 amp breaker to feed the new A/C compressor. This house has been a nightmare and it is not over with yet.

Roy

I feel your pain or at least I can emphasize with you as I am sure a lot of others on here do.

Right now I am (will be first of month) setting at seven slow/no pay/vacant units.

One I just got mid Sept. Over the counter tax sale. Someone already living in it. They paid Oct. rent but haven’t paid Nov rent. Negotiated price and got it for $1,500. The problem is I don’t think anyone else would want to live there as is so I would have to do a lot of work. I can let the people stay and try to get SOME rent or kick them out and let it sit empty until ??? What’s that they say – something is better than nothing. And they are not tearing it up just yet. They are still under denial if they lost it and that I bought it even thought I showed them the Tax Collectors Deed. It’s a done deal.

Another one I just got end of August, first of Sept. Then I went out West for a month so it set empty. Another tax sale. In pretty good shape but needs a little work. Should start collecting rent first of Dec. I know what everyone says about letting tenants work on a house but I don’t follow all (very few) of the rules. He is doing a pretty good job. I have enticed him into the idea he can buy it if he wants to, come next summer, if he pays rent on time.

Third one I sent text that rent was due and she replied “Oh, I moved out”. Well thanks for the warning lady. I am going over and putting the base board heaters back on the walls and reinstalling the thermostats that go with them. I guess they were going to take them but didn’t have time to load them up.

Forth one guy paid like clockwork for three – four years. Wife had baby and complications and money got very tight. He is trying to work it out and I am just going with the flow. I paid $3,800. for it and he has already paid me about $24K in rent. Gonna give him some slack.

Fifth one tenants split. Husband moved out and she is struggling. I have someone interesting in buying it and I think that is my route to take. Will decide end of this month.

Well you get the idea.

So Roy - Keep your chin up. Things WILL get better.

Sid,

This post has been more of a rant that anything else. I just needed to blow off some steam and I have now done that. I feel better too.

Thanks Kyle -

From last January till August, I had no vacancies and all 14 tenants were paying rent. Talk about an 8 month honeymoon, boy I was raking it during those months and was paying down debt at a rate of $5,000 per month. Now, the honeymoon is over and I am now seeing the flip side of this marriage coin.

Roy, yeah, I know we all blow off steam here occasionally. We're the only ones who understand the challenges we all face. Wish you could be up here in MO. A group of us (Sisco, #22, Mike SWMO, me, and another guy who isn't on Mr. LL) are getting together tonight to drink some coffee and solve the world's problems...or maybe just a few of our problems, but also to enjoy fellowship among others who "get" us. We'll have to do this at the 2018 Convention.

My guess on that insurance settlement is they are either a) blowing it wildly out of proportion like you said or b) lying. I've had several folks over the years claiming they were getting a big tax refund or an inheritance or some other big chunk of change. It's a line straight out of Deadbeat University 101: Dazzle the land lord with dreams of big $$$ so he neglects the fact I don't have two wooden nickles to rub together today.

All part of the game. Pay or move. You can always garnishee the settlement (if it's legit) later.

Roy, mine is a streaky business too. Getting enough labor in a timely fashion is a challenge.

With any investment that has unknowns, you need to always maintain a reserve account. I look at the most expensive costs of ownership, and try to keep that amount on the side for each property. Here are some of my concerns:

In case of tenant issues, I keep the cost of an eviction (lawyer), rehab and a few months worth of the mortgage and property taxes in a reserve account -- per property.

I also build up more funds to cover a new roof, change the pipes to copper, exterior painting, etc.

Roy,

If I had a nickle for every person "getting an insurance settlement..."

I keep beating this drum: ZERO TOLERANCE on lates. Beleive me, THEY PAY.

You won't get ulcers trying to decide what to do.

You won't have to vent on MrLL.

You will probably have your money or

You will be rid of a problem.

Right now:

Occupied = $0 income

Vacant = $0 income

BUT you have the opportunity to bring in dep and rent.

Maybe that home will come back to you ready to rent. Or maybe someone wants THAT home instead of the ones you offer now. Variety is nice.

MY court will be shutting down for the holidays and if I don't file in the next few days my case will not even be HEARD until JANUARY!!

ZT my friend, ZT.

BRAD

Robert J,

I have 2 reserve cash accounts,however, I would only hit those accounts for a 'true emergency' and what is going on now is NOT an emergency,...just a PITA inconvenience. I would rather borrow money on a 5% LOC than to raid my emergency cash accounts and deplete them first.

After 11 years as a LL, I can't think of one situation that has happened (yet) that I would consider an real emergency.

I have had dinner with 40 year LL veterans and they have told me that if I stay in this business long enough, somebody will eventually sue me for something. Maybe that will be my first true emergency but in the meantime I sleep well at night knowing I have one the best attorneys in my town that will keep the ambulance chasers away from me.

Brad20K - I am in small town like you. Here we have only one Constable that serves eviction papers. Even if I had filed today, those papers would not be actually served

Roy,

Roy,

I have walked in your shoes as I am sure many others here have as well.

This year when I was preparing my books for my accountant I ran a P&L on each property. I discovered I had lost over $20,000 on two properties due to unpaid rent and the turnover costs on those properties exceeded 3+ the normal amount.

I went back 10 years and did the same analysis on every property where I allowed a non-paying tenant to stay. The one common thread is once they stop paying rent they also stop taking care of the property. In all but one instance, my turnover costs are 3 to 4 times higher than normal. Lost rent is one thing having to renovate a property on top of lost rent is another.

Today I file as soon as allowed.