It happens to landlords all the time: your tenant calls you and says he can’t pay the rent. In fact if you own 10 units, you can expect to receive this call at least a few times a year. This puts the landlord in a bind: he has bills to pay too. He provides a service (shelter), and needs to be paid like everyone else. Most tenants are wage earners, but when they find themselves in a vulnerable financial situation, they think of landlords as meanies who are out to squeeze every dime out of them. Would your wage earning tenants be as generous if their boss came to them and said: “I can’t pay you your wages this week. I’ll try to get it to you next week”?

Having a rational policy beforehand will help you to take the proper course of action. When developing such a policy, there are a few things you should keep in mind:

• Eviction isn’t always the best immediate course of action. Evictions cost money and time, and often the tenant can get themselves back on their feet.
• How long will it take to rent the place out again? Even if you successfully force a delinquent tenant out, you may spend more time showing the apartment and seeing no income from the property.
• Is the tenant a good tenant? Landlords know how difficult and time consuming it is to run background checks on new applicants. If you consider the tenant otherwise a good one, it can be to your advantage to work something out with them.

A good policy toward tenants who can’t pay will include take these things into account, but there are other things you can do.

• If you like the tenant and don’t want to lose him, rewrite the lease at a lower monthly rent for a set amount of time, say 3 months.
• Make sure that you put it in writing that if the tenant falls more behind, you will have to evict.
• Don’t be afraid to apply a little psychological pressure. If you saw the tenant living it up in a restaurant a week before the rent was due, tell him. Make sure he knows how serious it is to pay the rent and that he will have to make sacrifices.
• If the tenant has lost their job, give them the number of an employment agency.
• Do all of the above in the tenant’s apartment, never on the phone.

No landlord wants to evict, but giving someone a break can cause problems. What if the tenant tells other people in the building you gave him a break? You’ll get a reputation as a pushover and everyone will want a break on the rent. If you do give someone a break, you might want to have them sign a confidentiality clause stipulating that they should not tell anyone.

People think being a landlord is like having right to print money. If you’re a landlord you know that’s not the case, and delinquent tenants can really put the screws to you, and the reality is that sometimes eviction is the best thing for all parties.