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(former)FormerSanDiegan
ParticipantI would only offer reduced rent if they IMMEDIATELY catch up on back rent. Your plans for possibly moving in next year seem flexible, so there is time to have another tenant in there for a year.
My threshold for giving a break is about 1/2 month’s rent. Once they exceed that point it typically does not turn out in your favor to give additional latitude. They are likely paying other creditors who are less forgiving (e.g. credit card companies). You need to be higher up on their list of priorities. You can offer a carrot (reduced rent for the next 4 months if they pay all back rent) a stick (3-day notice) or both (EconProf’s suggestion).
Either way you will lose about a months rent or more, either in vacancy between tenants or in discount the next 4 months to the current tenant.
In any case this is not a long-term solution. You either need to plan on getting new tenants or moving back in as you suggested you might. The predicament of the existing tenants is your short-term problem, treat it as such.
Participant[quote=FormerSanDiegan]I generally give breaks to my tenants, while protecting my downside. My advice would depend on
certain factors.How many months are left on the lease ? (or is it month-to-month) ?
What would be the current market rent for the unit ?
How long would it be vacant at that rate ?[/quote]
For example, if the tenant is having problems paying (this has happened to me once over the past 8 years) I let them out of their lease and made sure they were never behind more than 1/2 months rent. That way, I could withhold back rent from their deposit and have some cushion for damage.
Once a tenant gets a month behind, they rarely catch up, and your ability to obtain water from the turnip is limited to whatever deposit amount you have.Participant[quote=FormerSanDiegan]I generally give breaks to my tenants, while protecting my downside. My advice would depend on
certain factors.How many months are left on the lease ? (or is it month-to-month) ?
What would be the current market rent for the unit ?
How long would it be vacant at that rate ?[/quote]
For example, if the tenant is having problems paying (this has happened to me once over the past 8 years) I let them out of their lease and made sure they were never behind more than 1/2 months rent. That way, I could withhold back rent from their deposit and have some cushion for damage.
Once a tenant gets a month behind, they rarely catch up, and your ability to obtain water from the turnip is limited to whatever deposit amount you have.Participant[quote=FormerSanDiegan]I generally give breaks to my tenants, while protecting my downside. My advice would depend on
certain factors.How many months are left on the lease ? (or is it month-to-month) ?
What would be the current market rent for the unit ?
How long would it be vacant at that rate ?[/quote]
For example, if the tenant is having problems paying (this has happened to me once over the past 8 years) I let them out of their lease and made sure they were never behind more than 1/2 months rent. That way, I could withhold back rent from their deposit and have some cushion for damage.
Once a tenant gets a month behind, they rarely catch up, and your ability to obtain water from the turnip is limited to whatever deposit amount you have.Participant[quote=FormerSanDiegan]I generally give breaks to my tenants, while protecting my downside. My advice would depend on
certain factors.How many months are left on the lease ? (or is it month-to-month) ?
What would be the current market rent for the unit ?
How long would it be vacant at that rate ?[/quote]
For example, if the tenant is having problems paying (this has happened to me once over the past 8 years) I let them out of their lease and made sure they were never behind more than 1/2 months rent. That way, I could withhold back rent from their deposit and have some cushion for damage.
Once a tenant gets a month behind, they rarely catch up, and your ability to obtain water from the turnip is limited to whatever deposit amount you have.Participant[quote=FormerSanDiegan]I generally give breaks to my tenants, while protecting my downside. My advice would depend on
certain factors.How many months are left on the lease ? (or is it month-to-month) ?
What would be the current market rent for the unit ?
How long would it be vacant at that rate ?[/quote]
For example, if the tenant is having problems paying (this has happened to me once over the past 8 years) I let them out of their lease and made sure they were never behind more than 1/2 months rent. That way, I could withhold back rent from their deposit and have some cushion for damage.
Once a tenant gets a month behind, they rarely catch up, and your ability to obtain water from the turnip is limited to whatever deposit amount you have.ParticipantI generally give breaks to my tenants, while protecting my downside. My advice would depend on
certain factors.How many months are left on the lease ? (or is it month-to-month) ?
What would be the current market rent for the unit ?
How long would it be vacant at that rate ?ParticipantI generally give breaks to my tenants, while protecting my downside. My advice would depend on
certain factors.How many months are left on the lease ? (or is it month-to-month) ?
What would be the current market rent for the unit ?
How long would it be vacant at that rate ?ParticipantI generally give breaks to my tenants, while protecting my downside. My advice would depend on
certain factors.How many months are left on the lease ? (or is it month-to-month) ?
What would be the current market rent for the unit ?
How long would it be vacant at that rate ?ParticipantI generally give breaks to my tenants, while protecting my downside. My advice would depend on
certain factors.How many months are left on the lease ? (or is it month-to-month) ?
What would be the current market rent for the unit ?
How long would it be vacant at that rate ?ParticipantI generally give breaks to my tenants, while protecting my downside. My advice would depend on
certain factors.How many months are left on the lease ? (or is it month-to-month) ?
What would be the current market rent for the unit ?
How long would it be vacant at that rate ?Participant[quote=nostradamus]No, you should wait until the cost of owning is equal to or less than the cost of renting. So rents have to rise or home prices have to fall.
I bought in 1998.[/quote]
This is a great strategy, and offers good downside protection. The only problem is there have been at most about 4 or 5 years in the past 30 years where you could do this in San Diego.
We are likely entering (or are already in, depending on location) another one of these windows. The problem is that one also has to be ready from a personal standpoint (career, family, financial situation).
I would suggest that one should buy when they can afford to, while avoiding times when the market is extremely overvalued (e.g. 2003-2006 or 07) in relation to rents.
My rule of thumb would be when the cost to own is equal to rent plus a modest mid-sized sedan car payment (e.g. $300-400/mo or so). It is easy to forego a new car as the price to own versus rent.
Participant[quote=nostradamus]No, you should wait until the cost of owning is equal to or less than the cost of renting. So rents have to rise or home prices have to fall.
I bought in 1998.[/quote]
This is a great strategy, and offers good downside protection. The only problem is there have been at most about 4 or 5 years in the past 30 years where you could do this in San Diego.
We are likely entering (or are already in, depending on location) another one of these windows. The problem is that one also has to be ready from a personal standpoint (career, family, financial situation).
I would suggest that one should buy when they can afford to, while avoiding times when the market is extremely overvalued (e.g. 2003-2006 or 07) in relation to rents.
My rule of thumb would be when the cost to own is equal to rent plus a modest mid-sized sedan car payment (e.g. $300-400/mo or so). It is easy to forego a new car as the price to own versus rent.
Participant[quote=nostradamus]No, you should wait until the cost of owning is equal to or less than the cost of renting. So rents have to rise or home prices have to fall.
I bought in 1998.[/quote]
This is a great strategy, and offers good downside protection. The only problem is there have been at most about 4 or 5 years in the past 30 years where you could do this in San Diego.
We are likely entering (or are already in, depending on location) another one of these windows. The problem is that one also has to be ready from a personal standpoint (career, family, financial situation).
I would suggest that one should buy when they can afford to, while avoiding times when the market is extremely overvalued (e.g. 2003-2006 or 07) in relation to rents.
My rule of thumb would be when the cost to own is equal to rent plus a modest mid-sized sedan car payment (e.g. $300-400/mo or so). It is easy to forego a new car as the price to own versus rent.
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