Renters and Foreclosure
No, I am not talking about people renting after being foreclosed. I am talking about the risks renters face when their landlord is foreclosed.
When a non-commercial note secured by residential real estate is foreclosed the tenants have no rights. Nope, not even if there is a lease. They get evicted unless the new owner agrees to let them stay and that means the rent is whatever the new owner demands.
So, if you are a landlord how can you use this to your advantage?
Ethically and honestly.
I’m sure you think I am going to talk about how you can collect the rents and not pay the mortgage for some period of time.
I’m not.
But, a good marketing approach would be to get renters wondering if your competition will do that.
If you are a landlord, are you willing to prove to your tenant your investing business is financially stable? Why not? If you can raise their uncertainties about your competition while eliminating them in relation to you, that is how high end market rents are collected.
Mr and Mrs. Tenant, you don’t want your kids to get settled into the school and make some friends just in time for the sheriff to show up and evict you because your landlord didn’t pay the mortgage. I will prove to you the mortgage is paid any time you want it by showing you the latest statement.
What?!?! Are you nuts!???!!!!
They will know what your mortgage payment is and how much profit you are making and …
Yeah? So?
Look if any tenant really thinks their landlord is in business to NOT make a profit they are nuts. We all make a profit or we don’t keep it.
What do you think will help you more, especially with all the foreclosure talk out there now. Heck even CNN is running news reports are poor tenants who are evicted because the landlord didn’t pay the mortgage.
Smart landlords will use everything in their power to differentiate themselves from their competition, just like any other competitive business.
On SFHs we rent, we have been doing this for years. Now we have the media helping us differentiate ourselves from other landlords.
Man, I wish you were our landlord. The bastard who owns this house hasn’t paid the mortgage in months and we just received a notice from the sherriff that we are being evicted. What a crappy way to start a Monday morning having a deputy on your doorstep serving you an eviction notice.