How To Deal With Non Paying Renters?

[KRS1]

How do some of you deal with non paying renters? A definate advantage in Thailand is that you can kick them out immediately...i am assuming.

In the US I have heard of non paying renters (squatters) that have all kinds of stupid rights and can remain on your premises for more than 3 months.

[Khun Jean]

Happened to me four times. 3 of those in the Netherlands.

First one i was following all the 'rules', meaning i have none and they have all. Cost me at least 8 months rent.

Second time i bothered them every single day by knocking on their door, calling them. Cost me about 3 months rent.

Third time i changed the locks. I used the deposit to cover the missed rental payment.

Knock on wood, hope it not happens again as having rental property while living in Thailand is already difficult enough.

First time in Thailand i did the same. Could not change the locks because they already did that so i added a few.

Ended up using the deposit for missed rental fees.

Worst mistake is giving them time. 1 workday to late and they have a warning that within 3 working days the contract will be terminated and they have 1 month to move out.

That works until now every time. I rent out in the cheaper segment so borrowing a month from their friends is not too difficult. I am the owner and i am not in the loaning business.

If you don't do that it will eventually eat up the deposit and you go negative roi very quick and it takes a long time to recover from that.

I always use 2 months deposit.

If someone is 1 month behind you are in the danger zone and have to take steps to terminate before it will be 2,3,4,5 or more months behind. Once someone is behind it is seldom that it gets better.

Edited September 22, 2012 by Khun Jean

[KRS1]

Happened to me four times. 3 of those in the Netherlands.

First one i was following all the 'rules', meaning i have none and they have all. Cost me at least 8 months rent.

Second time i bothered them every single day by knocking on their door, calling them. Cost me about 3 months rent.

Third time i changed the locks. I used the deposit to cover the missed rental payment.

Knock on wood, hope it not happens again as having rental property while living in Thailand is already difficult enough.

First time in Thailand i did the same. Could not change the locks because they already did that so i added a few.

Ended up using the deposit for missed rental fees.

Worst mistake is giving them time. 1 workday to late and they have a warning that within 3 working days the contract will be terminated and they have 1 month to move out.

That works until now every time. I rent out in the cheaper segment so borrowing a month from their friends is not too difficult. I am the owner and i am not in the loaning business.

If you don't do that it will eventually eat up the deposit and you go negative roi very quick and it takes a long time to recover from that.

I always use 2 months deposit.

If someone is 1 month behind you are in the danger zone and have to take steps to terminate before it will be 2,3,4,5 or more months behind. Once someone is behind it is seldom that it gets better.

Thank you for this, there is much experience and insight in your reply. I am considering either investing in the US or Thailand right now, but the US has a much higher probability for squatters and stupid laws.

I think if the tenants changed the locks on my property, i would fill the key hole with superglue.

Edited September 22, 2012 by KRS1

[Khun Jean]

I think if the tenants changed the locks on my property, i would fill the key hole with superglue.

It would be wise to be able to open the door eventually. But i understand the feeling.

I am also a tenant myself here in Thailand and i have it in the contract that the locks are changed by me. I will not accept otherwise.

So i expect it from others too. On my rental properties i have always a few extra padlock 'rings' on the front door that tenants can use, but of course it is mainly for me in case i need to.

In my contracts i also have a clause that regular maintenance has to be done and that the tenant has to give permission to enter after an announcement of course.

At least four times a year, meters are checked (because ultimately the owner is responsible for usage), drains are cleaned, lights/switches are checked etc.

It just takes an hour but it gives you a view how the property is taken care of and tenants seem to like it as a service. win-win.

Condo fees are paid by me and are included in the rental price. Don't want to be confronted with bills later.

Edited September 22, 2012 by Khun Jean

[KRS1]

I think if the tenants changed the locks on my property, i would fill the key hole with superglue.

It would be wise to be able to open the door eventually. But i understand the feeling.

I am also a tenant myself here in Thailand and i have it in the contract that the locks are changed by me. I will not accept otherwise.

So i expect it from others too. On my rental properties i have always a few extra padlock 'rings' on the front door that tenants can use, but of course it is mainly for me in case i need to.

In my contracts i also have a clause that regular maintenance has to be done and that the tenant has to give permission to enter after an announcement of course.

At least four times a year, meters are checked (because ultimately the owner is responsible for usage), drains are cleaned, lights/switches are checked etc.

It just takes an hour but it gives you a view how the property is taken care of and tenants seem to like it as a service. win-win.

Condo fees are paid by me and are included in the rental price. Don't want to be confronted with bills later.

hahaha i assumed they changed the locks and trying to disappear without paying rent or giving you the key

Would you say overall the renters here pay on time? Do you ever do any type of income verification to make sure tehy can pay rent ?

[PattayaPhom]

Late payment charge after 3 days, eviction after 7 if non payment of rent. Have it in the contract and dont listen to any sob stories you cant go wrong.

[meatballs]

I once was late on my rent for something like 7-8 days. Sure glad nobody kicked me out as I could not access my bank funds at the time.

[asiawatcher]

Put your money in gold. You can cash it any time - it has appreciated faster than property especially in Thailand, yes it goes up and down but like property it is a hold, not sell. It does not earn monthly but you can always cash some out.

[saengsureeya]

I'm a renter myself and on several occasions I changed the locks. A spare set of keys went to the owner, because he has the right as an owner to gain access to his property. That was not something the owner demanded, but I think it's a fair thing to do.

I always try to pay the rent by bank-transfer; it saves me the hastle of getting cash from an ATM, waiting for the house-owner/agent to collect, etc. The owner gets a payment-notification by SMS and/or email.

Never a problem and always got my deposit back......usually leave the house in a better shape than when I moved in.

Tip for the house-owner: take care of a tight contract in which obligations for both tenant and landlord are described.

[Khun Jean]

I once was late on my rent for something like 7-8 days. Sure glad nobody kicked me out as I could not access my bank funds at the time.

The way i do it is that the tenant pays 2 months deposit. Clock starts ticking after 1 workday late. 5 weekdays later and i have no payment or a solid excuse the rental contract is cancelled and 1 month notice to leave.

A owner has to do something and most of the time the tenant says nothing and leaves the owner in the dark.

A phone call is all that is needed to prevent problems. If they don't call, i call. Most of the time that is all that is needed.

It goes both ways, if a tenant has a problem that need to be fixed, i try to do it same day or at the latest next day.

If the tenant has a payment problem and a reason that is out of his control then it is no reason to kick somebody out.

Staying on top of it prevents problems and when a tenant has real problems they have max 2 months to find something else.

Staying on top means you have to be near, or someone you can trust that does it for you.

The lower rents have few problems as in comparison with their salaries it is about 10-25%. Payments are right after salary payouts so changes people are short of money is small.

I do check for their ability to pay, proof of enough funds or proof of regular income is needed.

[PattayaPhom]

I once was late on my rent for something like 7-8 days. Sure glad nobody kicked me out as I could not access my bank funds at the time.

So you didnt eat, drink or anything for 7-8 days......thats the problem, most renters see paying the rent as the last priority but still have money for other things. In genuine cases take passport as security, if the tenant dosnt want to do that then you know they are conning you.

[lizardtongue]

I once was late on my rent for something like 7-8 days. Sure glad nobody kicked me out as I could not access my bank funds at the time.

So you didnt eat, drink or anything for 7-8 days......thats the problem, most renters see paying the rent as the last priority but still have money for other things. In genuine cases take passport as security, if the tenant dosnt want to do that then you know they are conning you.

Sorry but I can't see how you can ask for/take passport as I think I am right in saying that technically you are supposed to have with you at all times also it may prove a little difficult if the tenant has to do a visa run, or simply wants to visit neighboring countries.

[colinneil]

It is illegal any where in the world to ask/take a persons passport, any one who does this can have serious problems if passport holder reports to aurthorities.

[topt]

Condo fees are paid by me and are included in the rental price. Don't want to be confronted with bills later.

Is this normal in Thailand - also if you renting a house on a moo baan?

I am curious as In China I have to pay a monthly service charge on top of the rental and that is very normal.