Cash for keys is an unfortunate necessity in the world of rental properties. Whether for tenant issues or just wanting a tenant gone, cash for keys can be an easy and clean process to get a tenant to leave a property.
What is Cash for Keys
Cash for Keys is when the landlord pays the tenant to vacate the property, exchanging money for the tenant to turn over the keys. There are multiple reasons that a landlord could want a tenant gone but whereas the eviction process is very painful, cash for keys can be cheaper and easier.
It either be an alternative to evictions or a method of convincing a tenant to leave before the lease is up. If the landlord wishes to raise rent, renovate the property, or a new buyer comes in and does not want the tenant there, cash for keys is a very easy way to settle the problem.
Whatever the reason, when confronting a tenant always be honest and upfront with them. Being completely transparent about the reasons can lead to better negotiations and a smoother process for all. If you are unsure of which is going to be better for you, understanding the cost of eviction will help. Visit this blog post to learn more.
How Does Cash for Keys Work?
Cash for Keys is a 100% legal process, it just needs the written signature and agreement of both parties. If both parties agree on the amount, the move-out date, etc., the process is virtually over. Then, you simply pay the tenant and ideally, the tenant will move out on time.
However, life can be messy and things can go wrong so it is very important for you to keep documentation of everything so you can provide proof of the cash-for-keys deal. Importantly, do not violate the tenants’ rights in an attempt to get them to move out. For more information on what you can and can’t do for evictions visit Nolo.
How Much is a Cash for Keys Deal Worth?
One of the big questions a tenant will want to know the answer to is: “How much do I get for cash for keys?”. The answer can vary, but it’s first important to know that an eviction—depending on the state— can cost between $4,000 and $7,000.
With this in mind, we can put the payment amount at $1,000 to $3,000, which is the typical court fee for an eviction. This does not count other expenses, such as a lawyer. Another rule of thumb is to do half a month’s rent and the security deposit or a full month’s rent.
It may not always be satisfactory, especially after dealing with a difficult tenant, but cash for keys is an effective, cheaper, and cleaner alternative to eviction. However, for some, an eviction is the right way to go. So, it all comes down to the situation you are in and what you feel is best for your business.