Profitable Real Estate Investing Tip 5: Have a Plan for Evictions
Successful Real Estate Investor’s number one goal is to make a profit. The past month we have shared important traits all profitable investors share including reviewing leases annually, setting up a budget for property issues, setting aside monies for capital investments, and being proactive with maintenance. To conclude our series on the profitable real estate investor we will discuss the best way to tackle evictions. It’s almost inevitable that you will have to utilize some part of the eviction process to remove a tenant from a property at some point in your rental property business, even if you have the most thorough screening process. There’s ways to do this without losing precious time and precious profit.
Tip 5: Have a Plan for Evictions
Evictions are a real issue for investors. To reduce your number of evictions, vacancies and net higher income you can’t allow a tenant to stay in a unit for any longer than a month without paying. Or better yet, you should start the filing process 10-15 days after the rent is due if still unpaid. If you have them removed you still have to spend time and money to get the property ready for the next tenant.
Evictions are frustrating, time consuming and expensive and every tenant who is late on their rent has a reason and a story to tell. If you don’t have the heart to handle evictions allow your property management company to do this difficult work for you. Property Management is a huge help for investors. They take care of the hard work such as listening to the stories and still handle the business of collecting the rent, all fees and knowing how to move forward if the money does not materialize. Investing in real estate and acquiring properties that leads to residual income and profit is great but there’s more to it than just collecting rent. Having a proper plan for evictions ensures profitability and success!
A few things to think about:
- Complete a thorough screening process to ensure you are setting yourself up for success with a qualified tenant.
- Know the legal requirements in your area to complete the eviction process. Is a demand notice required? Where do you file? How much does it cost? What is the time frame from filing to removal?
- Send late and demand notices in writing that state specifically monies owed, payment due dates and the ramifications if not received.
- Maybe a payment plan will work for your tenants versus having to evict immediately.
- Yes “life happens”, but remember at the end of the day, you are running a business and your end goal is to make a profit.
At Sovereign Realty & Management we have ways to pre-qualify and screen tenants and if “life happens”, we have a plan for evictions with a clear process of removing tenants to prevent costly evictions and vacancies.
As you can see being a profitable real estate investor is highly involved and should not be taken lightly. Contact us and let Sovereign Realty & Management help you reach your goals of your investment business profitability today!