Management Tactic: "The Countdown" - Navigating Removal Without Formal Eviction

In the world of property management, encountering a problematic tenant is a rite of passage. But what happens when the usual playbook of eviction notices and legal proceedings seems like a path leading to more expense and headaches? Let me share a story that might change how you approach such a scenario.

When my team and I acquired a property in 2019, it came with one particular tenant who, to put it mildly, was not ideal. This tenant wasn't someone we had the chance to screen ourselves; they were part of the deal. From day one, they didn't pay rent, and any attempts to engage in dialogue were met with silence or outright aggression. The situation's complexities were compounded by the previous owner's murky disclosures about the tenant's conduct. Essentially, we were starting way behind the power curve, trying to manage a tenant who had no intention of cooperating.

Faced with this challenge, the conventional route of eviction seemed daunting and cost-inefficient. My management team outlined that eviction could take up to 90 days, with legal costs starting at around $3,000 and only climbing from there. Considering months of lost rents, and the fact we were renovating the rest of the asset you can see how legal fees are just the tip of the iceberg. That's when we decided to get creative with a strategy I dubbed "The Countdown."

The premise was simple yet unorthodox: instead of demanding rent, we offered to pay the tenant to leave. “Cash-for-keys” is effective but nothing new; that is a well-known tactic. We thought modifying that tool with a little pressurization would serve us even more. We placed the equivalent of their rent in an escrow account accessible to them upon vacating the property. However, there was a catch – for every day they delayed their departure, $50 would be deducted from the final amount they could claim.

Suddenly, the incentive structure was reversed. No longer was it about how long they could stay without paying; it was about how quickly they could move to maximize their payout. It became a countdown, with the tenant's inaction costing them money alongside us with each passing day.

After some deliberation, the tenant chose to leave, and we released about $900 from the escrow. When I look back at the situation, I consider it a win. Not only did we avoid the lengthy and costly process of eviction, but we also saved on the potential loss of rent, the time required to renovate the unit, and the negative impact a protracted eviction could have had on our community of tenants.

The story of "The Countdown" is one I share not just as a pat on the back for our team's ingenuity but as a viable strategy for property managers facing similar dilemmas. It's a testament to the power of creative problem-solving in property management. Eviction is a tool, but it's not the only one in our arsenal. Like any aresenal, weigh application of your options against the nature of the scenario you're faced with. Not every tenant deserves to be evicted or removed, and we always prefer to work with folks to figure out how to keep them in place. In this instance, we were forced to take stronger action.

Remember, the goal is always to provide quality housing, maintain a harmonious tenant community and ensure the profitability of your investment. Strategies like "The Countdown" showcase that with a bit of creativity, even the most challenging tenant situations can be resolved in a way that benefits both parties. So, before you go down the traditional path, consider whether a more innovative approach could serve you better.