Cash for keys is a controversial topic whether you are talking about a landlord & tenant or a bank foreclosing on a homeowner. Being a landlord is not an easy job, no matter how simple it may appear. Being a successful landlord is only possible through hard work, long hours, attention to detail, sacrifice, and a dedicated, supportive team to support you. “Landlording’ in 2020 has proven to be especially challenging based on the inability to remove non-paying tenants from properties.
Although it may seem counterintuitive, and frowned upon by some landlords, out of principle, cash for keys in many instances is less expensive than going through a lengthy eviction process. Typically, the amount paid comes with stipulations based on the condition that the property is left in.
The following are a few tips to ensure that your cash for keys experience goes smoothly:
- Hold a conversation: Approach the non-paying tenant with the option. Removing a non-paying tenant from your property immediately can be solved by motivating the tenant to simply vacate the property. Explain that they can have cash in hand if they agree to be completely out and turn keys over to you by a certain date with no damage to the property. Share the date and the amount you have in mind with the tenants. For the tenants who may just be down on their luck, these funds can help them with a new start. It also avoids a long, drawn out legal case that can tarnish their name. This is where you can still create a win/win situation for both parties.
- Get it in Writing: Use a cash for keys document that spells out the details of the agreement and includes the amount and the date and time of the transaction.
- Be Present on Moving Day: On move out day, be at the property with the paperwork and the check. This way you can somewhat control the condition the property is being turned over to you in. After you do the walkthrough, sign the final papers, and exchange the keys for the money.
- Proceed as if Vacated: Take care of the property as if it were vacated or abandoned. Change the locks, get rid of any garbage and food, and do any maintenance and repairs you need to get it ready for the next tenants.
Most tenants who cannot pay rent usually jump at the chance to have cash in hand and avoid a judgment on their records. The idea of paying someone who causes you grief is a hard pill to swallow. It is recommended that you take the emotion out of your decision making and look at it like a business. It may feel like you are losing by offering cash for keys, but your bottom line may end up winning.