What a non-paying tenant costs a Valley Stream landlord
The rent is the visible part. Underneath it the mortgage still goes out, the Nassau 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 four-bedroom on State Street. In Valley Stream, bought and paid for by us.
Valley Stream is roughly 40,634 people in Nassau County, ZIP 11580, and the housing stock is mostly cape cod, colonial, tudor. Around Green Acres Mall and Sunrise Highway, most of it is old enough that the mechanicals are on their second or third life. The Valley Stream 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 Nassau County for 15+ years. We know what the Valley Stream Central High 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
Each of the following comes with a retail listing of a house with a non-paying tenant, and none of it comes with ours.
- Agent commission
- $38,750 at 5% of the Valley Stream median none
- Seller closing costs
- About $15,500 on a $775,000 sale. We can cover these. none
- Repairs to make it listable
- Everything a buyer would flag, paid for before you list none
- Cleanout and removal
- Per truckload, before anyone views it none
- Carrying costs while it waits
- Taxes, insurance and utilities through the 78 to 93 days a listing takes to sell and close 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 Valley Stream
These are the two routes open to you with a house with a non-paying tenant, priced against what Valley Stream houses actually sell for.
Work it against Valley Stream's own numbers. The median sale here is $775,000. A 5% commission on that is $38,750, and seller closing costs of about 2% add roughly $15,500. Those are costs we can cover on our side. That is $54,250 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 Valley Stream the median house takes about 33 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 78 to 93 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 | $775,000 (Valley Stream median) | Our written offer |
| Commission | −$38,750 | None |
| Seller closing costs | −$15,500 | We can cover them |
| Repairs before listing | Out of pocket | None |
| Cleanout | Yours | Ours |
| Showings | Until it sells | One visit |
| Listed to signed contract | 33 days (Valley Stream 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 | 78 to 93 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 | $720,750 | The number we put in writing |
For the listing side we have used a 5% commission and about 2% in seller closing costs; your real figures may differ. Repairs and carrying costs are left out because they depend on the house. If yours is in good shape, a good agent may well get you more than we would, and we will tell you if so.
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 Valley Stream sold for $775,000 and took about 33 days to go under contract, then another 45 to 60 days waiting on the buyer's mortgage. That is 78 to 93 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 Valley Stream house with a non-paying tenant in it?
Yes. A non-paying tenant is one of the most common reasons landlords call us. We price the house as it stands and take the arrears situation on ourselves after closing.
Do I have to start an eviction before you will make an offer?
Not at all. Whether starting a case makes sense for you is a question for a landlord-tenant attorney and we can introduce you to one. It is not something we require.
Can I still recover the back rent I am owed?
Selling does not by itself settle what a non-paying tenant owes you, and how it is handled wants writing into the contract properly. Have your attorney look at that point, and we will work with whatever they ask for.
How long is this going to take?
A sale to us moves at whatever pace suits you, because there is no lender on our side to satisfy. The non-paying tenant case is the part with an unpredictable timeline, and that becomes our problem rather than yours.
Do you need to see inside the Valley Stream unit first?
We would like to, and we can work from whatever you are able to show us. A non-paying tenant rarely welcomes visitors, so we plan for that rather than making it a condition.