When should I start an eviction?

Hey, guys. Chris Knight here, business development manager with Red Door Property Management. Back again with some excellent content. Whether you are just getting started with your real estate investment journey or whether you're one of the long-term investors that are currently under the Red Door umbrella. One thing I wanted to discuss today, is that a lot of investors in general that are in real estate are wondering is when is the right time to start an eviction on a tenant that is behind in rent? So, to start this off, most importantly, what I try to stay within is never allowing a tenant to get much farther than 30 days behind in rent. So essentially one month's rent behind. Now, once this has happened, they are 30 days behind in rent. We are discussing the possibility of an eviction with our owners and we are also discussing the plan that we will take. 

So, number one, we will reach out to the tenant one time to set up a payment arrangement plan. This needs to be set where the first payment will be due within a two-week time frame, never longer than that. At this point, a tenant will be a month and a half behind in rent, which again exceeds my original idea of no more than 30 days behind in rent. So, no more than two weeks from that first initial payment being paid on that new payment plan. Now, once we have a plan established, once that first date comes due and that tenant payment has been made, we are back on track again. Now, if that tenant for some reason does not make that payment as agreed upon, and let me go back just for a second and say that this does need to be added to the lease as an addendum signed by the management company as well as the tenant holding both parties accountable to this plan, that's very important. 

Now, back to the payment arrangement. If that payment arrangement has been missed and for any reason, and unfortunately, I do mean any reason, there will be no further excuses that eviction is started. So, we will be reaching out to the attorney starting that eviction process and that tenant will be sent eviction paperwork. At this point, the tenant now knows this is business. We also didn't delay too far where the tenant has the inability to catch up, right? So, if we are getting two months behind in rent, it becomes extremely difficult for a tenant to catch back up on that type of delinquency and they might just let it go, start looking for a new place to just start over. That's very important to avoid. Once we've initiated the eviction, the tenant still has the ability to stop this process by paying the rent in full. At this point, if the tenant does make that payment in full, we will cancel the eviction. All attorney fees will then be added to the tenant ledger in addition to their current delinquency. But again, this should be an amount that the tenant should be able to catch back up on, assuming that their income level was at a point that we would consider them qualified to rent the property. And so that's going to be in another video. So, no double dipping on this one. That is when I would initiate an eviction. 

How the eviction process goes now quickly, how to proceed if the tenant is going to be evicted. Eviction processes typically take roughly about a 30 day time frame once that eviction is initiated. So, we have that waiting period if the tenant pays grades. We are still pursuing tenant payments, hoping that we can avoid an eviction. Tenant vacancy, turnover, costs, everything that comes along with that. So, we are pursuing that, but also waiting for that possession hearing to take place at that point day of possession. It's important that you go through that entire process, which includes here in Indiana, at least a writ of possession and a constable to deliver that writ of possession so that the tenant is forcibly, for lack of a better term at least for me, to be forcibly removed from that property. And if their belongings are already moved, the tenant still happens to be at the property, you will arrange whatever legal recourse is necessary for that tenant to reclaim their belongings. So that, in a nutshell, is how I would suggest proceeding again with the ultimate goal for this tenant to catch back up that relationship, to get back on the right footing and for the entire relationship to ultimately been successful. 

So that is my two cents on when to start an eviction. Stay with us for more content. And if you haven't already, I would highly encourage you to check out our market reports. Love the market reports, not only because they're pretty easy videos to shoot for you to enjoy, but it is extremely important content for you to be involved in. So, check out our market reports again. Chris Knight, Red Door Property Management. Check back for more content. Thanks.