What a non-paying tenant costs a Shirley landlord
The rent is the visible part. Underneath it the mortgage still goes out, the Suffolk County taxes still come due, the insurance renews, and anything that breaks still gets fixed by you.
A non-paying tenant turns a property that used to contribute into one that takes, every month, with no date attached to when it stops. That open-ended quality wears landlords down more than the arithmetic does.
What a lender does about a non-paying tenant
There is also the access problem. A tenant who has stopped paying rarely welcomes an appraiser, and a lender will not fund a property it cannot value properly.
So the retail pool for a house with a non-paying tenant narrows to cash buyers before you even begin. You can start there rather than arrive there four months and two failed contracts later.
Why local knowledge changes the number
A house on Johns Neck Road. A house on Seymour Drive. Both in Shirley, bought and paid for by us.
Shirley is roughly 26,360 people in Suffolk County, ZIP 11967, and the housing stock is mostly ranch, cape cod, hi-ranch. Around William Floyd Parkway and the Smith Point Bridge, most of it is old enough that the mechanicals are on their second or third life. The Mastic-Shirley stop pulls buyers who commute, which supports the good houses and does very little for the ones that need a roof. We have been buying across Suffolk County for 15+ years. We know what the William Floyd Union Free School District does to a resale price, which blocks still have oil tanks in the ground, and what a house like yours is actually worth here.
The proceeding does not have to finish before you sell
Landlords assume the sequence has to be: remove the tenant, then sell. In New York that sequence can take a long time, the timeline depends on the court, and an owner who is already exhausted has to fund the whole of it while collecting nothing.
We reverse the order. Sell first, and the non-paying tenant situation transfers with the house. What happens after that is our expense and our time rather than yours.
What we bring beyond the offer
Selling is not always the right answer and we will say so. Sometimes a tenant who has stopped paying is a fixable situation, and what the landlord actually needs is a good landlord-tenant attorney rather than a buyer.
We know the attorneys who do this work on Long Island and we are glad to make the introduction whether or not the house ends up being ours. Where selling is the right move, we have bought a great many houses with a non-paying tenant in place and none of the details will surprise us.
What you do not pay when you sell a house with a non-paying tenant
These are the costs of putting a house with a non-paying tenant on the market through an agent. None of them apply when you sell to us.
- Agent commission
- $27,500 at 5% of the Shirley median none
- Seller closing costs
- About $11,000 on a $549,990 sale. We can cover these. none
- Repairs to make it listable
- The work it needs to show well, out of your pocket first none
- Cleanout and removal
- Charged by the truckload, and done before the first showing none
- Carrying costs while it waits
- Taxes, insurance and utilities for the 88 to 103 days of finding a buyer and waiting on their mortgage none
Handling the sale without a confrontation
Some tenancies have become tense enough that the landlord wants no contact with the non-paying tenant at all. That is workable. We ask for whatever access you can reasonably give, we will not ask you to force entry on anybody, and we do not make an unrealistic showing schedule a condition of the offer.
If the relationship has reached the point where communication should go through counsel, your attorney will tell you so, and we will work around it.
What the two paths cost in Shirley
These are the two routes open to you with a house with a non-paying tenant, priced against what Shirley houses actually sell for.
Work it against Shirley's own numbers. The median sale here is $549,990. A 5% commission on that is $27,500, and seller closing costs of about 2% add roughly $11,000. Those are costs we can cover on our side. That is $38,499 gone before anyone counts the repairs it took to get the house listable.
There are two waits in a listed sale and people usually only count the first. In Shirley the median house takes about 43 days to go from listed to a signed contract. Then it waits again, typically 45 to 60 days, while the buyer's lender orders an appraisal and underwrites the loan. Call it 88 to 103 days from sign to keys, assuming nothing goes wrong.
The part worth understanding is what a signed contract actually guarantees, which is less than most sellers assume. A retail buyer with a mortgage contingency can walk away right up to the end. If they do not qualify, if the appraisal comes in under the price, if they change their mind and let the financing lapse. A share of deals die exactly there, after months of waiting, and the house goes back on the market with time on it. We are not borrowing anything, so there is no lender to satisfy, no appraisal to come in low and no contingency to exercise.
| Listing with an agent | Selling to us | |
|---|---|---|
| Sale price | $549,990 (Shirley median) | Our written offer |
| Commission | −$27,500 | None |
| Seller closing costs | −$11,000 | We can cover them |
| Repairs before listing | Out of pocket | None |
| Cleanout | Yours | Ours |
| Showings | Until it sells | One visit |
| Listed to signed contract | 43 days (Shirley median, once listable) | 24 hours to a written offer |
| Contract to closing | 45 to 60 days (waiting on the buyer's lender) | A date you choose |
| Total wait | 88 to 103 days if nothing falls through | Yours to set |
| Can the buyer walk? | Yes (mortgage contingency runs to the end) | No financing to fall through |
| Before repairs and carrying | $511,491 | The number we put in writing |
Assumptions: 5% commission and about 2% seller closing costs on the listing side, and both move from deal to deal. Repairs and the cost of holding the house are not deducted, since they vary by property. A well-kept house with a good agent can come out ahead of a cash sale, and if that describes yours we will say it.
What listing looks like with a non-paying tenant
If the arrears are recent and the tenant is still talking, the tenancy may be fixable, and listing later with a clean rent roll could net you more. We will tell you when we think that is the situation.
The median house in Shirley sold for $549,990 and took about 43 days to go under contract, then another 45 to 60 days waiting on the buyer's mortgage. That is 88 to 103 days in total, for a house that was ready to show on day one. The case for selling to us is when the occupancy rather than the house is what stands in the way, which with a non-paying tenant it usually is.
Common questions
Will you buy my Shirley house with a non-paying tenant in it?
A non-paying tenant is ordinary work for us. Tell us how far behind they are and whether anything has been filed, and it goes into the number rather than stopping the conversation.
Do I have to start an eviction before you will make an offer?
No. We never ask a seller to begin or finish a proceeding as a condition of buying a house with a non-paying tenant in it. If one is already underway that is fine too, and in many cases it can carry on after closing.
Can I still recover the back rent I am owed?
What a tenant owes you is a claim against that tenant, and it is a separate matter from the sale of the house. Whether it is worth pursuing depends on the specifics, so ask a landlord-tenant attorney for a realistic read.
How long is this going to take?
We can generally close quickly on a house with a non-paying tenant in it, and we can also wait if you need time. What nobody can put a date on is a court matter, which is exactly why selling takes that uncertainty off your side of the table.
Do you need to see inside the Shirley unit first?
Ideally yes, realistically often not. We price the space we cannot see conservatively and tell you clearly what we assumed, rather than walking away from a house over access.