As I said before in 5 years I have never missed a rent payment from a tenant. Im confused about your comment. My whole point has been that my strategy has lead to me collecting 100% of rent payments. In addition I have low vacancy and turnover rates. If anything this has made my business more profitable. I dont know why this increased profitablity would have caused me to miss mortgage payments.
I guess someone might have such low reserves that they cant pay the mortgage until they collect the rent payments each and every month. But if that is the case I would not be in the property business. What do they do if the market goes down and they have more vacanies or when they need to replace a roof.
Again Im really interested if someone can point to relevant court cases where starting eviction on the 15-20th was the sole cause of a tenant winning a case. That would cause me to change my current practices.
No one is interested in convincing you to change your business practices. If they work for you, great! Who are we to say what’s right and wrong. Maybe a landlord has never lost a case for not properly enforcing the lease. But your leaving that possibility on the table. I’d hate if I was the landlord involved in that landmark court case.
At this point, you couldn’t change your current practices if you wanted to. Your stuck with giving the tenants the option of paying late. It’s not your forgiving strategy that allows you to collect 100% of your rents, it’s good tenants and a bit of luck. Eventually a “professional” tenant with a good lawyer will mistake your kindness for weakness and you’ll be explaining why it’s your common business practice of not collecting rents or assigning late fees until the middle of the month. Just be cautious…
I think you might want to consider the points about discrimination. You may have been lucky for the last five years, but one case of discrimination can wipe out all of your profits.
Here in liberal (translate as you will) Seattle, we have the Tenants Union and the Seattle Office of Civil Rights, where tenants can receive free (to them, paid by us the taxpayers) assistance in going after any landlord they want for any reason. As a property manager, I have been involved in discrimination cases, where there are no grounds for discrimination, and after months of hearings, interviews, depositions, statements, more hearings and more interviews, the property owners have paid tens of thousands of dollars in attorney’s fees only to be found not guilty of discrimination.
Whoopee! No discrimination . . . but out the tens of thousands of dollars to get there. That is the point of following the lease and your state’s landlord tenant laws to the letter . . . to minimize your expenses (legal in this case) and maximize your profits. It’s a very simple equation.
You are so right. In fact, isn’t that why so many newbies don’t succeed? They assume because they haven’t had a certain expense yet, that they won’t ever have it. If you only have a few rentals, you could plug along collecting your pretend $100 per month (using guru numbers) for years without having a single lawsuit; or huge damage done by an angry tenant; or a discrimination claim, etc, etc, etc. But then when it finally occurs, the newbie loses every penny of “profit” that they thought they had for the last several years IF THEY ARE LUCKY. If they are not lucky and they lose the lawsuit, they could be wiped out completely - ALL BECAUSE THEY DIDN’T HAVE PROPER CASHFLOW!
If you walked out of a store without paying what would happen? Same principle. DONt take it. I have been waiting for rent from one of my properties but its the governments fault in setting up otherwise they pay first week of every month on rental assistance. Checks coe directly from assistance programs
In this case, the arguing has provided/sparked some interesting comments and points of view. It is great to see that this forum has people looking out for each other - I am very appreciative!
Someone’s experiences in this biz can save you dollars and headaches.
It looks like there are 2 schools of thought regarding landlording and these 2 points summarize the 2 schools of thought or Operateing Procedure
Do everything by a contract to the letter
Deal with tenants in a flexible way
It seems like people operate according to one of these 2.
thanks again for your posts, experiences, stories etc.