Thursday, October 8, 2009

Afraid to Foreclose or Evict? Don't Be!

Sometimes real estate investors are afraid to take action to evict a renter or foreclose on a house they sold on contract. Where does the fear come from? Ignorance of the facts.

Fear that Your Renter/Buyer Will Become Your Enemy
A renter or buyer should neither be your enemy, nor your friend. They should only be viewed as the custodian of your hard-earned asset. They agreed to pay your for the use of the asset while they care for it.

Taking legal action doesn't mean creating an adversarial relationship. Legal action is an extension of the business relationship. Here is an example of how to communicate and maintain a good relationship:
"Mrs. Jones, I understand that you intend to pay the rent on the 15th day of the month, instead of the 1st, when it was due. We'll look forward to receiving the rent on the 15th. In the mean time, you'll understand that we are giving you a 3 day pay or vacant and moving forward with the eviction process. As you as you have paid the rent, we'll be able to stop the process. We look forward to having you live in this home for a long time."
Fear that Legal Action Will Delay Your Payment
I've talked to landlords who say, "They promised to pay and I am afraid that if I start eviction they'll decide to leave and I won't get paid. So, I will do nothing and if they don't pay me next Friday I'll take action then."

The opposite is true. For people who are concerned about paying the rent, they will find the money from friends, relatives, selling something, etc. The legal action becomes a fire that lights them into action.

The other tenants are never going to pay, so the faster they are out, the sooner you have good tenants that will pay you.

Fear That Eviction or Foreclosure Costs Too Much
Not taking action costs more. If your rent is $800/month and you wait for two weeks to take action, you just lost $400. In the state of Utah an eviction takes 3 weeks. Late on the first? Have them out and re-rent the house by the first of the next month. Need help? Attorney Ron Dunn will evict for $450. Tell him I sent you and he may give you a discount. Same fee for a foreclosure. You pay filing costs, he does the rest.

What are your issues with foreclosure or eviction? Share a success story.

No comments:

Post a Comment