You may find this hard to believe, but sometimes it’s best to pay a tenant to leave instead of evicting them. If you’ve ever gone through the eviction process before, you know how long, drawn out and expensive it can be. So instead of going through the pain and financial loss, it’s just better to pay the tenant and be done with them.
But this isn’t necessarily ideal in every situation. Sometimes tenants can be greedy when they think they have you by the short hairs. Certain scheming types will see your generosity as weakness and attempt to exploit it. At other times, you aren’t in a rush to evict and the judge will clearly see things your way, so it’s better to wait it out and let the court handle everything.
All in all, we know that it’s sometimes better to pay off a tenant just to get them out of your hair forever. To help you determine the right situations, we’ll share certain scenarios below when we feel this is an excellent idea.
Scenario’s Where Paying Your Tenant to leave Makes Sense
Scenario #1: You Have a Buyer Looking to Purchase Vacant Property
At different times throughout your career, you’ll decide to sell some of your rental properties for one reason or another. In certain situations, you may end up finding an eager buyer willing to pay top dollar for your property. But they may have a contingent where they’ll only purchase your property as long as it’s completely vacant.
In many cases, this isn’t going to happen because the new landlord often wants to purchase property fully stocked with tenants. But it does happen from time to time. And if the deal is good enough, you’ll need to take steps to get your tenant out of the unit as quick as humanly possible. Often times, offering them cash to leave is the best way to motivate them to move.
You know your situation better than anyone else. If it seems viable, offer your tenant a fair sum of money to move out quickly. Determine the amount based on the rent they currently pay, what they’ll have to pay when they leave, and moving expenses. More often than not, tenants will jump at the deal as long as they have an affordable alternative housing option to move into nearby.
Scenario #2: Your Tenant Is Consistently Late Paying the Rent or Fails to Make Rent Payments
Tenants run into financial struggles all the time. This is the cost of doing business when you enter the real estate game. But that doesn’t mean you have to take their late payments or failure to pay lying down. You do have options to protect your investment.
For starters, you can initiate the eviction process legally if you feel it’s the right way to go. On the other hand, if you’d like to get this tenant out as fast as possible, you can offer them cash or offer to waive their back rent just to get them out of your life for good.
In many cases, someone down on their luck is going to need assistance when moving out of your place. So you may need to offer them money to pay for their moving fees if you are really desperate to get them out of your rental unit once and for all.
On the other hand, this tenant may see how badly you want to get rid of them and ask for even more money. You’ll have to decide the appropriate amount to pay them in lieu of taking legal action. If their asking amount is too high, you may be better off hiring a lawyer and beginning the eviction process instead.
Scenario #3: Your Tenant Is Causing Damage to Your Property
Lastly, you may need to evict one of your tenants because they are creating havoc and causing damage to your property. Instead of allowing them to stay in your house or rental unit, it might be better to just pay them to get rid of them before they create even more problems.
Again, you have to weigh the situation yourself. If they are causing very expensive damage that needs to be fixed, it’s often best to pay them and be done with them altogether. So pay close attention to your situation and decide whether it’s best to pay them off or hire a legal team to evict them according to the letter of the law.
As you can clearly see, certain scenarios mean it’s best to pay off a tenant as opposed to evicting them legally. But the important thing to take away from this information is you have to decide when the timing is right. Only you can determine if you’d rather pay off a tenant to get them out of your life quickly. So think about your situation and determine if this is the best course of action or not.