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It Can Happen: 3/4 of Tenants late
By JLP | December 29, 2008
As some of you may know, I became a landlord earlier this year. I now own two duplexes (4 units), one advantage of which is that it is very unlikely that all my tenants will be delinquint at once.
Unlikely, but not impossible of course.
So far this has worked out well. Earlier this year one tenant was 30 days late paying her $1,095 rent. Not that big a deal - the other 3 tenants were paying and I had no cash flow trouble while I waited for her to get caught up (which she eventually did).
Another tenant has taken to paying late on a regular basis. This I have been able to deal with because the other 3 have been paying on time. I’ve had no problems making the mortgage payment before I get that month’s rent in full (plus late fee of course).
They might each miss a payment now and then, and I’ll inevitably deal with vacancies, but having 4 units helps me sleep at night because even if one is vacant or delinquent, in theory I will have the other three paying tenants to support me.
Theory, as it turns out, works out much better on paper.
One of my tenants missed his November payment, as usual. I waited to be paid, which usually happened about 15 to 20 days late every month. Well, the 30th rolled around, and he called me - not to schedule a payment but to apologetically inform me that he couldn’t pay and that he was moving out instead (allegedly he was laid off).
Conveniently, he had arranged for a friend to take over the lease, which began in December. But I was still out November’s rent money (though the former tenant claims he will eventually pay me, which I’ll believe when I see it).
This is the kind of thing that would have been not that big of a deal except that his neighbor, my other tenant, didn’t pay for November either. Her husband got laid off, her ex-husband died unexpectedly, the grown kids all came to stay during the funeral, blah blah blah. She begged for time to make me right (and she always has), so I gave it to her.
That was November - two tenants out of four didn’t pay. OK, no big deal, I have reserves. At least my other duplex was doing great. Both tenants pay on time, every time.
Except for in December. This month I received only one rent check from Duplex 2. The other lady has still not returned my calls or invoices or emails, and it looks like I may have to begin the eviction process as she is 30 days late tomorrow.
Meanwhile I still haven’t received rent from the tenant with the laid off husband (though we are supposed to meet today so I can collect November AND December rent from her in person).
So in summary, I have 4 units. For the months of November and December I should have collected - but have not - an additional $800 for unit 1, $1,600 for unit 2, and $1,125 for unit 4.
My checking account should be $3,525 higher today than it is. UGH. And I had to scrape together almost all of my reserves to pay my property taxes before the year is out. HOPEfully when I meet with the lady from unit 2 today she will pay me the $1,600 in full that she owes for these last 2 months. That will help.
More on Meg’s landlord adventures at The World of Wealth
Topics: Miscellaneous |
