It happens so often people believe it’s ok. You get the notice from your tenant that they are leaving and that they want you to use the security deposit to cover the last month’s rent.

No problem right?

WRONG!!!!!! BIG PROBLEM!!!!

That security deposit (or damage deposit as it is often known) is not rent. It’s meant to pay for any damages that may have occurred to the property or to get the unit back to it’s original condition (less wear and tear of course) that it was when the tenant moved in.

It’s not rent.

So What Do I Do If My Tenant Is Leaving?

Your first step is to explain to the tenant that the rent still needs to be paid and the security deposit is not rent.

If you need to go into detail you can explain what the security deposit is meant for (see above) and that it is treated differently than rent.

If they continue to insist, you may have to take more drastic steps with them and explain that while there are landlords who may allow this, due to typical laws regarding security deposits you cannot legally accept the deposit as rent.

Many tenants are simply concerned that they will not get their security deposits back, so it doesn’t hurt to go into detail to let them know what has to be done to ensure they do get it back.

This can include providing them with a copy of the initial walk through, the costs you will be charging them for any additional cleaning, garbage removal and/or light bulb replacements along with level of cleanliness required.

They Continue To Refuse To Pay

If, after your persuasive discussion, they still refuse to pay the last month’s rent you’ll have to let them know you will be forced to start the eviction process.

And you need to follow through on this one!

At this point, and if it goes this far, the relationship is likely not as friendly as it once may have been which means if you don’t go through with the eviction you’ll be paying out of pocket for cleanup and damages after they vacate. And there will be cleanup!

For some reason tenants feel you’re just being mean spirited at this point and like to get even. That means leaving you a ton of work.

Now this doesn’t happen every time, but all it takes is once or twice for you to start realizing the less glamorous aspects of landlording. Yep, I’m talking about cleaning up other peoples’s messes.

Tossing moldy food, removing old garbage, picking up empty and partially empty beer cans, vacuuming floors, window cleaning and just general cleaning up after other grownups (or alleged grownups) loses it’s appeal quickly.

Paying an expensive cleaning service out of your own pocket makes it even more unappealing!

So you simply need to start the eviction process, explaining to the tenant that if the eviction goes through, it will appear on their credit report, it will affect their ability to get rentals int he future and that you still expect the property to be properly cleaned when they vacate.

Or they can simply pay the rent and then get their security deposit when they’ve moved out and properly cleaned up.

Have you been burned by this? How’d it make you feel and would you allow it again?

Share your story below!

It’s not that I’m a liar, but if you are calling about a crappy tenant that somehow snuck through my screening and I want to get rid of, my tenant references may not be complete.

If you don’t ask the right questions, I may not supply all the information.

As an example you may ask if they pay the rent on time. My response, “Yes, yes they do.”, but I didn’t mention they have been smoking and have three dogs in my non smoking no pet property…

It’s not that I want to lie to you, but I want them out and if I tell you everything without getting asked, they may never leave.

If you ask me the right questions, I will give you the answers, but you have to ask as I may not volunteer it!

Plus, never mind the legal ramifications if they try to sue me later for sabotaging their escape from me! So unless you ask, I’m not even sure I can legally tell you!

How’s that for a justification…

I’m Not Alone

So while you can’t trust my tenant references, the same can be said for the other landlords you might call as well.

If you don’t ask, “Would you rent to them again?” you might never hear the words “HELL NO!”.

Granted even if you do ask if the tenant is horrible many landlords would sugar coat it just to avoid answering and to pass the problem on to someone else.

It’s a self preservation thing.

That’s why you need a list of questions to ask the applicants current landlord.

Questions like:

• Do they always pay on time?
• Are they getting evicted?
• Did they give your proper notice about moving?
• Would you rent to them again?
• Were they good tenants?

Having questions like these at the ready can help you avoid getting stuck with someone else’s problem. But it’s also not your only step to do that.

Tenant References Are Not All Equal

The reality is the current landlord is not going to be the best reference, they still have skin in the game. In fact the tenant may be great and the landlord could be crap and trying to sabotage them moving, you just don’t know!

That’s why this is just part of the entire screening process. But an important part!

You’ve just completed your first tenant eviction. Now the rubber hits the road.

Do you pack it in, sell the property go back to your nice safe GIC’s and money under the mattress so you don’t have to deal with this type of stress anymore, or do you put your head down and trudge forward?

Unfortunately, many landlords use this to call it quits which is pretty disappointing. Rather than taking this as an incredibly valuable lesson, they simply make the decision it’s not worth it.

And I can understand that, after all I’ve been there.

Tenants you’ve trusted with your property have betrayed you, they’ve left a massive mess behind in the home you lovingly fixed up, and you’re stuck cleaning it up, your debts are racking up as you don’t have income coming in to cover mortgages, taxes, insurance and utilities.

It’s a real kick to your pride, to your motivation and to your dreams.

The Tipping Point

It’s also a tipping point.

If you’re not familiar with a tipping point it’s that time when you’ve reached a pinnacle of a mountain and if you move just a little bit further forward, you tip forward and have cleared the peak.

Or alternatively you don’t quite break that crest and begin to slip backwards.

In my mind when you slip backwards, that’s when you’ve given up and decided to move on. You decide landlording isn’t for you and you fix the property up, sell it and move on.

Often that becomes the easy decision because after all who would want to go through the nightmares of another tenant eviction?

If it’s happened once, its going to happen again and what if it’s worse right?

Well, that would be one way to think about it, but what if you looked at it as a lesson you learned and can improve upon, rather than an indicator of future problems?

Lessons From Your First Tenant Eviction

I’m betting if you decide to move forward over that mountain top and past the tipping point you can take a ton of valuable experience from the situation.

Why was the tenant evicted?

Were they poor tenants to begin with? If so, would better screening processes have helped?

Was it a miscommunication that started the troubles? Would clearer communication have prevented this from getting to where it ended in an eviction?

Was it a breach in the lease? Perhaps explaining the ramifications of breaches right from the the start could have prevented it.

There are simply dozens of different paths that you could learn that will take you to better, more positive tenant experiences going forward.

I learned a ton from my first eviction (here’s a link to the article I wrote about it – Five Lessons From My First Eviction).

Big Picture Thinking

After your first eviction what if you realized you’ve now gone through one of the biggest challenges that almost every landlord faces, the eviction process.

What if after your first eviction you now understood how evictions work and it took the fear, the frustration and the confusion away from having to do it again?

What if you realized you simply chose the wrong people for tenants and that with more stringent screening you could easily avoid the mistake you made?

You do realize I have a course on Screening Tenants that teaches you all the secrets I learned from dealing with over 1,500 tenants and after having rejected literally tens of thousands more.
It will change the way you screen and make future (or even your first) eviction considerably less likely.
It’s a comprehensive course going through not just screening, but how to write your ad to attract better tenants, but what pre-screening questions to ask to help you avoid time wasting applicants that you’d never rent to anyway, explains the process of running credit checks along with where to get them done and how to understand them and perhaps most importantly, what to say to tenants you have to reject.
If knowing all this would help your ability to move forward you can go take this course here, Screening Tenants The Educated Landlord Way.

Big picture, after you’ve gone through evicting a tenant you;re going to be more diligent with choosing your next tenant. You’re going to be more thorough explaining ramifications of breaches. You will now understand the steps involved with evicting a tenant and the time it takes.

All of these will make you simply a better landlord.

Ultimately though it’s your choice. Do you take these valuable lessons and the experience you’ve already gained and throw it away due to one bad situation, or do you take the experience and use it to become an even more educated landlord?

What are your thoughts or experiences regarding your first eviction?

Hopefully you never have the challenge of having tenants skip out, but it can happen.

It usually happens like this, you deposit the rent check, but find out a few days later it bounced, or you didn’t receive the electronic payment from the tenant and suddenly can’t reach them, or maybe you pick up the payment in person every month and discover no one’s home!

First step is usually to panic, but the second step is important to move to quickly and that it to make sure they are actually gone.

There’s a chance they may be away, there could be a medical emergency or something may have simply come up and they forgot.

Confirming They Have Vacated

To start with, you’ll want to follow up with any and all numbers and emails you may have for them. Hopefully in the case of a couple you have both individual’s phone numbers, so text and call both to follow up.

For first contact this way try not to sound panicked or angry (yet anyway) as it may simply be an honest mistake. You’ll have plenty of time to be angry later if they have vacated.

Inform them they missed rent and you need to talk to them to get this cleared up. Additionally, and this is will be part three, you need to inform them you will be doing a property inspection the next day.

Most states and provinces require a 24 hour notice to tenants before you can enter and unless you are 110% positive they have disappeared it’s good practice to advise them about this via a call, text and an email as well as posting it 24 hours prior on the property.

You see legally until it’s confirmed they have abandoned the property they’re still tenants and protected by the tenancy laws, which means the notice is required pretty well every time.

It may set you back 24 hours, but if they haven’t vacated and want to put you in a tough spot it does open up an ugly can of worms, especially in pro-tenant areas where they love an opportunity to make an example of landlord mistakes. So just do the proper notice!

Accessing Your Potential Vacant Property

24 hours later here you are entering the property and now you get your answer, sort of.

Is it empty, are there piles of garbage to sift through, and not much else, or is everything still there?

If it’s empty, you can assume they have skipped out. Still follow up with more emails, texts, calls (try to do all where possible just to create a paper trail showing you tried) informing them of any potential clean up costs and that you will be changing the locks.

The majority of tenants are good people, there are however serial abusers. These are the ones that cost you time, money and are a huge pain. If you break any of the rules, like not giving notice or not informing them you were changing locks, they use this as an excuse to cause you problems.
“We were coming to clean, but you changed the locks before we could, so you can’t change us for cleaning.”
“We hadn’t vacated, we had an emergency so now you owe us money for a hotel.”
“You didn’t give us proper notice you were entering my home, so I am suing you for breach of privacy.” And so on.
Creating paper trails and often delaying an extra day or two to ensure you are following the rules can be a pain, but it does protect you from those serial abusers.

If there are piles of garbage and/or furniture it starts getting trickier.

Have they vacated and are still coming back to clean up? Unlikely, but possible.

Was there an emergency and they had to rush out? If everything looks untouched and nothing appears packed and taken away, very possible.

The more items in the home, the more important it will be to take pictures and/or video of the contents of the property just to protect your self.

Maybe they did abandon the place, or maybe there was a medical emergency and your tenant was in an accident or in the hospital and can’t reach you. You’ll need to try and confirm this.

That’s where a good application form can be handy as it should have emergency contacts listed on it and/or friends and relatives along with employers you can call.

It’s at times like this you are hoping it’s just abandonment and your tenant isn’t hurt, but either way you need to confirm.

Often if they did abandon after a few calls to their relatives (moms are great), they suddenly reach out to you to explain the confusion and how it’s all simply a misunderstanding. Or you hit a dead end.

If you can confirm they are gone, now it’s time to move to damage control.

Damage Control Time

Your priority now is to get the property back into rentable condition so you need to start getting quotes for any cleaning and repairs if you hire people out, or even if you are planning on doing the work yourself so you have a valid number for deductions from any deposits you are holding.

The quotes become handy to prove you aren’t over charging for work, although use your discretion. Your plumber may be able to charge $75-100 an hour to fix a leak, but if you’re doing it your rates may have to be a tad lower…

This can delay moving forward as you align all the quotes, but an extra day or two shouldn’t make that much difference versus doing ti right and avoiding any drawn out court hearings later.

So get those quotes and get those locks changed and then see how quickly you can get your property back on the market.

Leftover Security Deposits When Tenants Skip Out

Your final challenge will be the security deposit and for this you need to know your local laws.

In my area, I have ten days after the tenant vacates to return their security deposits or provide a written statement detailing any deductions and what they were for.

But where do you return it?

After all they skipped out, you may not even know how to find them.

Looking at most landlord tenant laws they typically state you can send it to the last known address you have for the tenant which just happens to be your property address.

You’ll need to pay a little extra for this, but you can simply go to the post office and send the statement, and a check for any remaining deposit if there are any to the address of your property.

If they are smart, they are getting their mail forwarded to their new address so you completed your obligation. If they are “less smart” they are not getting their mail forwarded and it will be returned back to you eventually undeliverable.

You can hold onto that returned mail, unopened, as proof that you did exactly what the laws outline.

Hopefully you never have to go through an abandoned property, but hopefully you now have an idea of what to do it it does happen!

The old adage is everyone is a salesperson whether they know it or not.

When you were a young child you sold your mom on the idea you needed ice cream, when you were older you sold your friends on what you were going to do after school together and when you became an adult you sold someone on hiring you, on dating you and so on.

Your life ends up becoming an ongoing negotiation and when it comes to Real Estate negotiation becomes even more important.

The big difference when it comes to being a successful Real Estate investor is negotiating without emotions. It simply comes down to the numbers and what works.

Negotiations Aren’t Necessarily Fair

When you’re trying to buy a house or work out an issue with a tenant often times the negotiating doesn’t seem fair.

It may not be that one party is trying to take advantage of the other (although it can be the case), it may just be the two parties may have different expectations.

The home seller may have memories and emotions tied up into selling their family home while the investor may only be looking at the dollars and cents of what it will generate for revenue and at what point it’s not worth while to purchase.

If the gap between the two numbers is too significant, it simply won’t work. It’s not that it’s not fair, it’s that reaching an agreement that works for both parties is simply unachievable. Unless one party changes their goals.

To Win A Negotiation Both Sides Need A Win

We constantly hear about shrewd negotiators and how people won big at the negotiating table, but for a true win, both sides need to benefit, or lingering resentment creeps up over time.

If you have the mindset that you have to win at all costs, you’re probably not going to like where this article is going. You see, I believe both sides can win.

Creating a fair negotiation (within reason after all, just because a tenant wants a swimming pool installed doesn’t mean you should install one…) where both sides creates an environment where you may not win everything at once, but you open the door for future wins.

That home owner who sold you his home and who believes you treated him fairly may refer his other buddy to you as well for a fair deal.

That tenant who you didn’t raise rent on, but who now maintains the yard for you as part of not raising the rent is a little happier with you as they didn’t have to move.

If you can establish wins for both sides it makes moving forward that much easier.

Would You Like To Be A Better Negotiator?

I’ve been a sales person, a negotiator and a deal maker for decades now. I’ve learned a ton over the years about how to not just negotiate, but how to ensure the majority of the time both sides walk away happy (maybe not always happy, but at least wiser?).

Funny Side note – I recently visited an old boss and he reminded me of one of my “negotiating tactics” I had for more difficult clients. I was in the computer wholesale business for a long time and had to deal with some shrewd business owners and some bullying business owners.
One particular bullying owner who was known for pushing the boundaries asked for a price on a product. I can’t remember the exact number I quoted but say it was $35, now we don’t typically negotiate on a one off order in wholesale as there wasn’t a ton of margin, but he came back and said he would only pay $30.
So I countered, and said ok, $40 then.
He informed me I wasn’t allowed to make up a higher price when negotiating and I told him if he could make up a lower price, why couldn’t I make up a higher price.
To make an already long anecdote shorter, he hung up on me and ended up calling my boss to complain and once he calmed the client down ended up selling him the piece for the original $35.
Although the client was initially upset, moving forward he bought a lot of computer equipment from me and understood that while I would work with him, there were negotiating boundaries.
I can’t even count how many times I’ve used a variation of this tactic with everyone from my kids to tenants to business clients. The kids ask to stay up until 11 to watch a movie, I counter with 10:30, they insist on 11, I counter with 10 and suddenly 10:30 becomes agreeable.
A tenant asks how much is the rent, I say $1,100, they counter with will you negotiate and I say sure I’ll take $1,200. Suddenly $1,100 looks good.
Sometimes it’s just fun to negotiate!

When you’re negotiating from a business standpoint you need to set your boundaries. What the most you can pay, what the timeline might be and what works for you.

If you can narrow those down and align them with the individual you’re negotiating with you can both win. And that will ultimately make you a better negotiator!

I’ve been tossing around ideas for additional courses to create to help more landlords and I’m wondering if a Real Estate negotiating course would be of interest to anyone?

I could potentially do a two hour online workshop walking landlords through negotiating property purchases using many of the negotiating strategies I’ve learned through my experience and courses I’ve taken to improve my sales skills.

Or I could create a multi part online course similar to my Screening Tenants Course that has not just lessons, but incorporates videos and downloads to help you out.

Leave me a comment, let me know if this might interest you and we’ll see where this takes us. Or alternatively leave a comment telling me what you’d like to learn more about for either upcoming articles or future courses!

Bill, why so many articles, I’m getting emails every day from you? What’s going on?!?!?

I’m getting questions like this from people, so I thought I’d do a quick update on day 19 of my 30 day personal challenge.

I took a long time off from this site to deal with everything else in my life and came to a realization I still have a ton of info to share.

It started with a few interviews and requests for interviews I had in June and July and these requests have started to increase as I’ve become more active again.

I’ve been actively answering questions, mentoring some new Real Estate investors and generally helping out landlords through multiple online forums and groups the last month and WOW, do people need help!

Mistakes Can Be Costly In Real Estate

When you’re starting out, or if you’ve been lucky for a long time, in Real Estate you don’t understand how expensive your mistakes can be.

One bad tenant could cost you thousands of dollars, buying the wrong property could set you back years or even a decade in your goals, not knowing the local laws and rules could handcuff you from moving forward. There are just so many pitfalls out there unsuspecting landlords could fall into.

Just last night I had a phone conversation with an individual who was considering buying a rental property from a “friend”. He made half a dozen mistakes right from the initial offer he made and was on the path of becoming a landlord who was destined to fail if he moved forward with this “deal”.

Mistakes, or simply a lack of knowledge can be a real kick in the pants with Real Estate.

I know, I’ve taken quite a few kicks to the butt over the years!

But I can help people avoid some of those mistakes, hence my personal challenge of writing 30 articles for thirty days.

That’s Why You Are Getting So Many Emails

Many of the systems I have in place for this site are automated. It;s how I can get more done in a timely fashion.

If I have my article written by 11am MDT, it automatically goes out to people who have subscribed to one of my tips series of emails, or one of my free giveaway items.

Some landlords have mentioned receiving them twice or even three times, that means you may have signed up for multiple lists and I apologize I haven’t been smart enough to ensure you only get one email.

The current fix is to use the unsubscribe button in the email you receive and it should list the various different lists you are signed up to. Unsubscribing from one or two of these will cut down on the duplicates, sorry it’s not easier.

12 More Daily Emails, Then A Slower Pace

My plan is to continue this on for another 12 emails ( I said thirty, but I’m not counting this one, so it will be 31 total) , then I’ll get back to weekly emails for the most part.

Currently these are quickly digestible two or three minute info packets (well most of them) easily read and applied. Or that’s my intent anyway.

Once I move back to a weekly format I’ll spend more time writing a single article that I can go into more depth on. Sort of deeper dives into specific topics.

I know and understand I’ve scared a bunch of people away with the flood of emails, but for those sticking with it I hope you’re enjoying the journey and getting some benefits.

Longer term, I’ll be introducing more courses, possibly a mentoring program and maybe even a private group where we can help each other succeed and move forward.

If you have any feedback leave me a message below, or reply to the email you’re likely to receive linking to this article.

Additionally, it would help me tremendously if you could share this with any landlord groups or landlord friends you know. The more people I can reach, help educate and inform, the better I’ll feel and the more I will want to contribute.

Looking forward to hearing from you!

When it comes to fixed term leases or month to month leases and which is the best option for you the answer is ….

Either.

You see there is no right answer as it all depends on your local landlord tenancy laws.

In some areas month to month gives landlords all the power as it only requires a months notice to terminate the lease. In other ares, like mine, month to month gives the tenants all the power as I can only evict for a breach of the lease.

You might think that would be fine, if the tenant isn’t breaching the lease terms why wouldn’t I want them. Well, if they are exceptionally needy, if they are neat hoarders, if they are horrible at looking after the property, if they are causing issues with other tenants or neighbours making my life hell and about a dozen other reasons that aren’t explicitly in breach of my lease but aren’t helping me, why would I want to keep them?

For our region fixed term is the way to go as under our local rules I only need to give thirty days notice to terminate a fixed term lease when it is coming up for renewal. I tend to give more as I want to make sure they have plenty of time to leave, but it does put the control back in my favor.

To help me even further, and because I understand the local rules, when I get new tenants I typically only use a three month or six month initial lease giving me a feeling out period.

If they pay on time, if during my inspection everything passes muster and if they generally seem to be good tenants, we move onto a longer lease. But again, that’s in my region!

It’s so important to do your homework and find out your local rules and laws about everything tenant related before you go down the wrong path and pick the wrong lease.

Why don’t you share you lease stories below. Did you learn a lesson the hard way? I know many of my lessons came that way…