When you notif y tenants about rent increases, also send them a letter that explains how expensive it is to move, so they don’t react to the rent increase without thinking. (see the sample Tenant Planning to Move Letter in Appendix B). It should say something similar to the following:
I understand that you’re thinking seriously of moving.
So I took the liberty of putting together a checklist of the costs you’ll have to pay, if you are indeed prepared to move out. I’ve always felt that I would like to know up front what my entire expenses are going to be before I make a move. So I thought it would be helpful if I included the following checklist I’ve used in the past so that you don’t underesti- mate the expense of moving. Quite frankly, it can be pretty costly. I’ve found that out myself the hard way.
Something else: If you do decide to stay, I would cer- tainly appreciate it if you would let us know before I rent the space to someone else. I really would feel terrible if that hap- pened because I’ve always valued you as a tenant. Anyway, here is the moving checklist that I use—I hope it helps you know in advance the money you will have to come up with:
1. A security deposit
2. Income lost (time off of work)
3. First (and possibly the second) month’s rent in advance
4. The actual moving cost and packing and unpacking costs
9 / Keeping Good Tenants
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5. Deposit on utilities
6. New telephone installation
7. Any items broken and replaced during the move 8. Any other items you may need in the new location I suggest that you take the same precautions that I do when I move. So my advice is to add up items 1 through 8 to get an idea of the total dollar amount that you’ll have to come up with immediately. In any event, I hope this checklist has been helpful. If I can help out in any other way, please let me know.
When we write down how much it will cost them to move—
$1,500–$2,000—they think twice about moving. It seems when I move, I never think about it, either. I just go and, suddenly, I have all these bills to pay—truck rental, time lost, and new utilities. So you want to outline what it would cost to move. Then you close the letter with:
“Again, please let me know in the next ten days what you decide, so that I don’t lease your unit to someone else without your knowing about it in advance. But you really ought to stay, because otherwise somebody else is going to take it, and we don’t want to lose you. It will cost you $1,500 to $2,000 to move now; we hope you decide not to.”
This letter works because $1,200 to $2,000 is serious money.
On the other hand, you should also have a letter for tenants you would like to get rid of: “Please get out tomorrow. It is not nearly as expensive as you thought; we will even buy the packing tape and the pickup truck. Besides, we are demolishing that house next Friday . . .”
I suggest you generate these form letters from your computer, have them on file, and send them out as needed. In two minutes, you might have saved yourself $1,000. And that is all there is to it.
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C H A P T E R 10
Evictions, and How to Avoid Them
Peace is not the absence of conf lict. It is the absence of inner conf lict.
—Unknown
Let’s start by making one thing clear: Even when you have started eviction proceedings, the tenants still live there, unless you stop them. The sheriff is the only official who can move people out of their homes. If you go in for any reason, you could be violating a law, tres- passing, and setting yourself up for a lawsuit.
When I go to doctors because I have a health problem, I do what they tell me. Similarly, when I have an eviction, I hand it over to a pro- fessional—an eviction/collection attorney. I stop talking to the tenant and do what the eviction attorney tells me to do (or not to do). This protects me because my law yer takes care of the legalities involved and is covered by malpractice and/or errors-and-omissions insurance.
If you handle the process yourself and it is not handled correctly, you risk getting sued. Because laws in every state are different, it’s impor- tant to involve a local attorney. It also provides me the advantage of separating myself from the relationship with the tenant, so I can say,
“We warned you and gave you plenty of chances. Here’s the Collec- tion Department. This issue is out of my hands now.”
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SECRETS OF A MILLIONAIRE LA NDLORDIf you want to handle evictions yourself, it’s not that complicated, but it requires a lot of steps. According to my experience, if you are willing to deal with tenants, screen them, warn them, and then deal with the problems quickly—not let situations drag on for 30, 40, or 60 days—you can usually avoid evictions. That’s clearly a better way to go.
Usually, people involved in eviction cases don’t show up in court, so default judgments are common. After the judgment is issued, the tenants have seven to ten days before the sheriff moves them out.