SAVING FOR FUTURE
The Cost of Evictions WHAT TO DO WHEN YOUR SOURCE OF PASSIVE INCOME BECOMES AN ACTIVE PURSUIT OF DUES.
by Becky Bower
nfortunately, evictions are a costly risk when owning or
price of the storage unit for aban- doned possessions from the deposit. Beyond the deposit, you can take your prior renters to small claims court to pursue the owed rent money. Quick Tip: Some courts allow you to combine an eviction and small claims lawsuit! You can also garnish their wages or tax refund, although these pro- cesses require taking your tenant to court. To garnish your prior renter’s wages for back rent, you’ll need to sue your tenant, win a judgment and then get a court order to recover the payment directly from your tenant’s earnings. Federal law limits wage garnishment to no more than 25% of the tenant’s net pay (and if the tenant has other garnishments, you’ll have to wait to get paid), and state law can place stricter limits. In some cases, you might be able to get a wage gar- nishment order through the eviction alone rather than going to small claims court. However, if your tenant
time and is typically awarded on first-come-first-serve basis. The benefit to this method is if you suc- cessfully snag a tax garnish then the wages are automatically collected from their refund. Finally, you can hire a private debt collector. We recommend Rent Recovery Solutions, as they charge a flat fee (no commission) to send collection letters and calls on your behalf and report the collected debt to the credit bureaus: Experian, Equifax, and TransUnion. While it’s difficult to gauge what the true cost of an eviction is as the amount of time spent on an eviction varies and the price of legal fees differs from state to state, some analyses have shown the cost to ex- ceed $10,000 per case! As you work through a troublesome tenancy, take deep breaths and remind your- self that you’ll get through this. • Becky Bower is a marketer and writer specializing in multifamily legislative trends. As the Content Strategist at the ApplyConnect blog, she authors in- depth guides on how to manage, grow, and scale within the rental housing industry. ApplyConnect is a Think Realty supplier offering consumer-initiated tenant screening to landlords and turnkey operators. Learn more about the benefits available from ApplyConnect to Think Realty members at ThinkRealty.com/ Supplier-Discounts.
managing a rental property. While some tenants vacate after a simple eviction notice, others require local courts and the aid of the Sheriff’s Department. If the court sides in your fa- vor, then your tenant will have a set amount of time to vacate the premises. This time frame depends on your local laws, and in some cases when the eviction was filed. If your tenant doesn’t leave within the allotted time frame, you’ll need to contact the Sheriff’s Department (and potentially pay a fee) to escort them off the property. COLLECTINGWHAT IS DUE There are a few options you can do to try to collect past due rent or fees from your evicted tenant. First, some states allow you to deduct past due rent, property cleaning fees, and the
Top of Mind
WHY SAVING FOR THE FUTURE WITH REAL ESTATE IS A NO-BRAINER.
by Kevin Ortner
id you know that one-third of Americans have no retirement
benefit from the proceeds of the entire investment, allowing you to grow your money more quickly than you’d be able to on your own. NO. 3 YOU GET TO REMAIN IN CONTROL. Perhaps best of all, when you invest in real estate for your future, YOU are in control. With stocks and shares, you’re at the mercy of the stock market. With real estate, you’re in the driver’s seat, and there is a lot you can do to increase your investment’s profitability. How will YOU save for your fu- ture? •
and here are three reasons why it’s easier than ever before to save for the future with real estate.
savings? While planning for the fu- ture should be top of mind, the truth is, many of us aren’t doing so well. But there’s still hope, and while putting money in a savings account for your retirement years may be what your parents did before you, investing is a far more efficient way to start saving. The best part? You can start today by putting your hard-earned cash into something tangible that will be worth even more down the road. Sure, you could invest in the stock market or bonds, but there is a reason why real estate is the number-one investment choice for so many. Real estate not only allows you to benefit immediately in terms of cash flow but also in the future as well, as your property will appreci- ate, and your equity will grow as you pay down the mortgage. Investing in real estate can be an actual ticket to financial freedom
NO. 1 YOU DON’T NEED A LOT OF MONEY UP FRONT. When you own a rental proper- ty, you don’t always need a large portion of money up front. If you’re a first-time homeowner, you can ben- efit from an FHA loan, which means you may be eligible for a low-inter- est rate and able to make a down payment of 3.5 percent as well. NO. 2 YOU CAN BENEFIT FROM LEVERAGE. With real estate, you can use leverage to grow your money and get a sizable asset using relatively little of your own money. You put in the down payment while the bank puts in the rest. Good luck getting a bank to do the same for Uber stocks. Despite only putting in a per- centage of your cash, you will still
was a government employee or was on a government paid program (unemploy- ment and welfare), you’ll be unable to garnish their wages. Some states allow you to garnish the tenant’s taxes, but keep in mind that this is typically only available within a certain amount of
Kevin Ortner is the President and CEO of Renters Warehouse, America's leading real estate investment services com- pany, and the author of Rent Estate™
Revolution. With the Renters Warehouse Investor Marketplace, renters can find quality homes to lease, and investors can plan, research, buy, track and sell their real estate investments all in one place. Learn more at www.renterswarehouse.com.
10 | think realty magazine :: july / august 2019
thinkrealty . com | 11
Made with FlippingBook Online newsletter