Another Cash for Keys Storytime: We're too nice! (Copy)

We bought this house in April of 2020 from a widow whose late husband had bought this house when houses were really cheap in Detroit. Her husband moved his sister into the house. Supposedly the sister paid $600/month rent to her brother. We wonder if she really ever paid rent. We kind of doubt it.

Upon purchase we contacted the tenant and told her we were doing a gradual rental increase to $900 (still below market level but cheaper than going through a tenant turnover) if she decides to stay in the property. Yes, she would love to. And she even complied with the gradual rental increases. Not without a lot of fuss of course. We also let her know that we’d be working on the house.

Eventually the rent turned into a hostage situation that was pending the work and the schedule of the workers and the tenant’s work schedule. The phone calls escalated. Why isn’t it done yet? Why is my living room torn up? I want my bedroom a different color. When are you renovating the kitchen? I want to tell you where the cabinets should go. No, I want more cabinets. I can’t let them finish the bathroom because I’m going to work now. Why isn’t my bathroom done yet? I insist since you’re repainting it all anyway that my bedroom is hot pink.

This was MONTHS like this of way too much coordination with a difficult person who eventually stopped paying rent. We had repainted the interior, changed her bathroom vanity, put in a new bathroom floor, changed some windows. Many things! We even repainted her whole basement floor. But it wasn’t ENOUGH or FAST ENOUGH for this tenant. So she called the city that it was an unlawful rental. We were in the process of getting the house renovated so WE could call the city to make it a legal rental.

We had to pay the ticket and then we HAD to go finish the work with her in it not paying rent, just to pass the city inspection issues that came up. We came back into the house only to discover she had scuffed up every painted wall, let her cigarettes scorch the new bathroom vanity and the worst thing was she chained up her little dog to a pole in the basement where the dog urinated and defecated and ruined the newly painted floor.

That was the Last Straw!

We have a real problem with chaining up dogs. But add the rest, and she was BEYOND the point of SHE’S GOTTA GO! It is incredibly rare that we’ve ever bought a house with someone else’s tenants in it and it worked out for us. I wish I had just evicted her from day one. This cost us months of holding fees when the goal was to renovate it and sell it.

We finally got her to move AMAZINGLY on her own by offering her $1,000 cash for keys. We had an eviction notice as well, but she didn’t wait out the court time. She found herself somewhere to live and off she went. Hallelujah!

I have a rental applicant now who wants to use it as an elderly group home. I usually do not consult with my buyer about tenant placements. It’s my specialty to know whom to choose, but in this instance, it felt right to consult with the new buyer. This is something new for us to rent to a group home. The buyers have approved. So this will be interesting. I won’t be the property manager, so I may not know. But I was able to get $1,200/month rent, which is really at the top of the rental market these days for a 3-bedroom house in Detroit. Having it listed at $1,200/month was attracting large families with large Section 8 vouchers. The house just wasn’t large enough for that many bodies in my opinion.

Lessons Learned

I don’t know! I don’t do gradual rental increases anymore. That buys too much time for the tenant to do what they were going to do anyway while we wait and see. I would have liked to have just evicted her. I’d like to be that person who can not be swayed by anyone and just handle business. Get them out so we can renovate the house and if they qualify, they can rent from us again. That’s what’s best for business. But then I meet the people and I don’t have the heart to do that, even though history has proven it’s the best idea. Really, I just don’t want to work with tenants anymore. We’re too nice! It doesn’t seem to help us in the long run or even the tenants who take advantage of us. Tenants need to be renting places they can afford. We can’t afford to do low rental amounts. There’s no profit in it. We don’t work for free. Sure seems like it sometimes though.