Tips For Handling Non-Paying Tenants

If you are a landlord, one of the most frustrating situations you'll have to deal with is that of non-paying tenants. You need the rent money to cover your mortgage, taxes, and other expenses, but the renters have left you high and dry without a payment. While this situation is stressful, it's important that you deal with it carefully. Here are some tips to help encourage your non-paying tenants to get the cash flowing again.

Have a personal conversation.

Creating a paper trail of late notices and the like is important, but don't just send notice after notice in the mail without talking to the non-paying tenant in person. Stop by the place at a decent hour in the evening -- after they get home from work, but before you'd expect someone to be getting ready for bed. Be kind and compassionate as you explain that you are there to collect the rent check. Sometimes, just seeing you in person will prompt them to make the payment; people feel worse about letting down an actual person than an "invisible" entity they only communicate with via mail and the phone.

If they don't pay you when you show up in person, they may at least explain why rent is late. Perhaps their child landed in the emergency room last week and they had a surprise medical bill. Maybe they just lost their jobs. You can assess the situation and use your best judgement to determine how to go forward. For instance, if someone is in dire financial straights, you can offer to work with them and give them an additional 2 weeks to pay before you take action. If you are willing to be accommodating, they'll often be more willing to pay.

Don't hesitate to take action towards eviction.

If there's no reasonable explanation as to why the tenants have not paid -- or if they are not willing to work with you on some sort of payment plan -- then do not hesitate in taking action towards eviction. The hope is not that the tenants will leave, but rather that your actions will cause them to take you more seriously and make that rent payment.

Laws on eviction vary by jurisdiction, but generally, you can send a notice that states that you'll evict the tenants if they don't pay within three days -- and you can do this about a week after the rent has gone past due.

If you are frequently dealing with non-paying tenants as a landlord, one move you can make is to hire a property management company to oversee your rentals. They will take care of rent collection for you, taking steps to collect on late payments and evict tenants as  necessary.