Renters Still Not Paying…

Everyday it is the same thing…no money. I just don’t understand people. To me, paying your rent/mortgage should be at the very top of your priority list (except for tithes and offerings). I have gone hungry and would do it again if it came between paying bills and eating. In college I had a part time job and just about no money. I just barely had enough to cover the rent and bills. So what I did was bought 59 cent bread, 49 cent lunch meat, slice cheese and a little mayo and rationed it out as long as possible. On occasion I would buy the frozen burritos, and ration them as well. Long story short, I lost about 20 pounds between graduating college and getting my first career position.

But most people these days don’t do that. They put there cable, internet, phone and a host of other bills ahead of their rent. I know I am just venting here, but it really doesn’t make sense to me to see a tenant that has other non-essential bills that they are paying when they cannot maintain their rent. Am I crazy?

Has any other investors out there been in my shoes? Please share your stories, to give a little encourage to the rest of us.

4 thoughts on “Renters Still Not Paying…

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Allen Taylor

  2. I’m not an investor – I’m just a minimum wage rent slave – but I’ve known a number of mid-size landlords (I worked with a landlord group opposing local government policies intended to regulate rentals out of town). It seems just about every experienced landlord has at least one tenant horror story.

    There has been, on average, a massive decline in the “quality” of renters over the past few decades: this problem is global, or at least national and landlords cannot avoid it unless they operate in the upscale market segment. This has been largely driven by mortgage innovation and lax lending standards which have allowed millions of marginal buyers to own homes. Basically, the renter pool has been “creamed” and today’s renters are considerably poorer than their counterparts of a generation ago.

    For example, in the 1980s, median renter income was roughly 55 percent of median homeowner income. Today, it’s roughly 45 percent and is continuing to trend downward.

    Today’s average renter has less disposable income, greater debt load, and in most cases probably no emergency fund. When these renters face an emergency, they often use YOU as their emergency fund, i.e. they pay for the emergency with money they should be paying you.

    The best way to avoid problem tenants is to screen them well. It is customary for a landlord to check with an applicant’s current landlord, but how many landlords go back to the second or third previous landlord? Current landlords have an incentive to give THEIR problem tenant a glowing recommendation just to get rid of them; the previous landlord(s) has no such incentive and you can count on them to be more honest with you.

  3. The stories I’ve heard about non-paying renters are way too many to mention here. But besides basic background checks likes credit, criminal and eviction histories, it is critical to call an applicant’s previous renters and get their history. Remember spot don’t change on whatever animal.

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