As a landlord, it can be tough to recover the money that is owed to you by tenants, such as those who have not paid their rent or who have caused damage to your property. Although you might be able to evict tenants who don't pay or who don't take care of your place, actually getting the money that you are owed from them can be challenging.
You can take these individuals to court and have a judgment put against them, but there's a good chance that you might not ever recover this money. Since you probably need your cash now, this can be upsetting. Luckily, there are a few ways that you can avoid unpaid judgments from your tenants.
1. Screen Tenants Carefully Before Allowing Them to Move In
This is probably the most important step that you should take as a landlord. It's important to run credit checks and background checks on all potential tenants before allowing them to move into your units. Those who already have unpaid judgments and evictions on their record might be likely to do the same thing to you. Plus, those who have pristine credit scores might be more likely to try to prevent negative entries on their credit reports.
2. Try to Strike Up a Deal
In some cases, it can pay to try to strike up a deal with the tenants who owe you money rather than immediately taking them to court and having a judgment put against them. If you talk to tenants who owe you money, offer them a settlement of a reasonable sum and let them know that you won't take them to court if they pay you by a certain date, there is a good chance that you will get the money that is owed to you. Just make sure that you get these deals put in writing, and ensure that the tenant knows that there is a date by which you expect this money. If you are not paid, it's still smart to get a judgment, since there is a chance that you will receive the money that is owed to you later.
3. Hire a Judgment Recovery Company
A judgment recovery company will work hard to recover the money that is owed to you. You will have to pay out a portion of the money that you receive to the business, but it can be worthwhile because they will do all of the work to find the person who owes you the money and recover the cash.
As you can see, there are a few things that you can do as a landlord to help prevent unpaid judgments. Follow these tips, and you can help ensure that you receive the money that is owed to you.