I didn't mean to start a series on Rental Income Disasters; however, I'm developing one! You either love managing property, or you hate it! Personally, I love it! The disasters are challenging, and I enjoy the challenge. Yes, managers get a kick out of exchanging our crazy stories. Oh, could I share a few stories!
Pate and I had a few chuckles this week as we cleaned up another Rental Income Disaster. Pate is my property management partner. This story is just another reason why home owners should hire a property manager. Think about what you would do in the following story. Good news for our property owner is that she was spared the stress and worry of collecting this debt.
Okay, a guy moves into one of our rentals two weeks ago. He could hardly wait to move in! We ran our usual credit and criminal history check. Verified his job, and all was good. After picking up the keys, he sends me a text telling me not to deposit his checks. I already deposited the checks. He then told me that his relative died, and he no longer had money to cover the checks. Not sure how the relative passing away drained his bank account over night. None-the-less, the checks were going to bounce.
After telling the renter that the checks were deposited and we would collect on insufficient funds, he tells me that he can't move in. Later the same day, he tells me that the bank says the checks are good and he's going to move in until Christmas. He signed a long term lease-to-own.
The checks cleared my bank and we paid the mortgage on the home for the home owner. Suddenly, the money was reversed out of my account. The renter placed a stop payment on the checks! The mortgage was paid; therefore, my account was down over $1,600. Luckily, we had other funds in the bank; however, we were unsure if we would get this money back from the renter without placing a judgement on his record.
After some phone calls to the tenant, and another day later, we received the payment in full via "money order."
Property management in College Station can be interesting! Of course, Pate had a similar situation with his property management in Longview just a few days prior. We had a good chuckle comparing notes and scenarios.
I went to bed thinking about what the property investor would have done had she had to deal with collecting these funds from out of town. She may not have ever gotten the money, and the tenant may have lived in the home for the rest of the month rent free. Who knows!
Then I got to thinking about how quickly Pate and I made decisions about how to handle our simular situations, and try to resolve the matter without making it worse. I believe that it is our experience of over 20 years each that lends us to making quick decisions. I thought about the number of clients that I've worked with and contracts that I have signed. After running some numbers in my head, I've signed well over 10,000 lease contracts. WOW!
