Tenants in Edmonton say they can`t afford rent anymore, only 4 months into 1 year lease... trying to skip out...

[joe123]

Tenants gave me notice that they are out middle of Feb. Lease is until Sept 2014. They say they can't afford rent. Got more info from them and it appears they didn't realize utilities for a single family home would be "so high"... They want me to reduce the rent from 2150 per month to 1600... This is a large single family home. I know they are "obligated" to the lease, and I "should" be able to get the cost of finding replacement tenants from them... but I don't see that happening... getting rent from them has been a battle, they've always been late...



Am I better off trying to work with them, reduce the rent, or find new tenants? The house is in Edmonton, and I don't live there. Current PM is a twit. Either way I'm out some money...



Anyone have any ideas? How are things in Edmonton looking? easy to rent out? Know of a good reasonable PM?

 

[JimWhitelaw]

Unfortunately, as you've found out, a great lease is a good thing to have but it can't force people to stay where they can't afford to. Your focus should be to minimize losses and move to better clients ASAP. Get them out and find someone who can afford the rent. Vacancies in Edmonton are very low, but there's a limited pool of folks looking for $2000+ rentals. Getting any pm, let alone a good one for only one property will be challenging and expensive. A few tips:



1. Find a family that has the income to support the rent; avoid any group of friends etc that has to pool $$ to afford it.

2. Make sure you have great photos and ad copy.

3. Do a thorough check on prospective new tenants, especially verifying their income and debts.

 

[Sherilynn]

Just get the house rented as quickly as possible. Mid-February isn't a horrible time for a tenant change. We just had an unexpected turnover in a decent quality main floor suite ($1395 plus utilities, not including garage) and it was no trouble to fill.



$1600 is unreasonable for a decent house in Edmonton. I wouldn't accept it.

 

[joe123]

Thanks for the input. It's nice to have this as a resource I think I will "let" them leave and find new tenants...

 

[cagoodrow]

To add to the above comments, given the market in Edmonton right, now I would have no doubt you will be able to find good quality tenants without compromising your monthly rent. Now that the New Year has begun to settle in, often people will look to make a change, mostly "up", and a nice single family home would certainly qualify.



If your interested in further PM conversations, send me a private message and we can chat.

 

[invst4profit]

Defiantly find new tenants but do not allow your present tenants to simply walk away scott free. Send them a letter indicating they will be responsible for the lease until you find a replacement tenant. Make sure they understand you will take them to small claims court and if necessary have their wages garnished to pay what is owed.

It does not matter at this time whether you believe they will pay or that you will even bother to perse them for the debt. What is most important is that they believe you will. Also make sure they understand you will do the same regarding any unpaid hydro bills.



Remember these people have already proven they are not trustworthy and financially incompetent. They will no longer be your tenants so you have no reason to care about their personal financial situation. If they fear small claims court and the destruction of their credit record they will come up with the money but either way it will be a significant amount of money and definatly worth pursue in small claims court. When you win they will be forced to pay.



I have recently applied to small claims court for a paultry $500 dollars simply on principal. The process is very simply and operates much more efficiently and fairly than the landlord tenant board. Every landlord should at some time go to small claims court for the experience and education.

 

[kfort]

You can also mention damage to credit.. And I believe the most practical example for many irresponsible folks is pointing out that a strike/ collection on their credit file may impact their ability to get a cell phone next time they try to "upgrade". Or new/used car financing. Between these two things you'll probably hit a hot button item.

 

[alaas1977]

Hey Sherilynn



The mainfloor suite you rented for $1395 plus, how many bedrooms does it have and which area is it located? We're renewing a bunch of leases shortly and I'm curious what others are charging.



We also have noticed that very low vacancy and upside in rent. We just purchased a side by side duplex and the prior tenants were paying $1050 plus (4 bedrooms). We upgraded the suite, new floors, paint etc and we got $1495 plus utilities to great tenants in Alberta Avenue



Lisa

 

[alaas1977]

Just a thought



Sometimes its better to let the tenants go if they cant afford it. The last thing you want is someone not paying the utilities as they cant afford it, then you're looking for trouble, especially in Edmontons cold climate.



Lisa

 

[Sherilynn]

[quote user=alaas]Hey Sherilynn



We also have noticed that very low vacancy and upside in rent. We just purchased a side by side duplex and the prior tenants were paying $1050 plus (4 bedrooms). We upgraded the suite, new floors, paint etc and we got $1495 plus utilities to great tenants in Alberta Avenue



Lisa




Well done!



The suite that I mentioned is a 1050 sf, 3 bedroom suite in a nice part of Beverly. The suite was mostly upgraded 7 years ago, (although not quite to the standard which I would like). It is a reasonable suite for a reasonable price.