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If the home is vacant or the tenant stops paying, you still owe the mortgage, taxes, insurance and utilities, so your protection is a cash reserve, fast and correctly priced re-leasing, a firm collections process, and, if needed, a lawful Michigan eviction. Planning for these two risks before they happen is what keeps one bad month from becoming a bad year.
This guide covers what vacancy and nonpayment actually cost, how the Michigan nonpayment process works in general terms, and the tools JMZ Management offers owners, including Eviction Protection and a Guaranteed Rent Program.
Example only. Using hypothetical numbers, a home with a $1,098 mortgage payment, $350 a month in taxes and $110 in insurance costs the owner $1,558 a month whether or not rent comes in, before utilities and lawn or snow care. If that home normally rents for $1,900, each empty month means $1,900 of lost rent while the $1,558 in costs still has to be paid out of your pocket. Replace these with your own figures. At JMZ, no management fee is charged while a home is vacant.
Most vacancy comes from three things you can control:
When a home is priced to market, JMZ reports an average of 17 days from listing to signed lease, and 98.4% occupancy across the properties it manages. Keeping good tenants is the cheapest vacancy fix of all; see how to improve tenant retention and tackling vacancy.
A consistent process gets most late payments resolved early. At JMZ, collections start with phone calls, texts and emails, followed by legal notices. Our post on handling late rent covers what to say and when, and mediation techniques covers options before court.
As JMZ describes the process for nonpayment of rent in Michigan:
According to JMZ, the process typically runs 3 to 8 weeks from filing, depending on the court's schedule, and an eviction can begin as early as 7 days after the lease's grace period ends. Self-help, such as changing the locks or cutting off utilities, is not allowed. Our Michigan eviction timeline explains each stage.
The best defense against nonpayment is a well-screened tenant. Verify income and rental history for every adult applicant using the same written criteria. Our post on best practices for tenant screening explains how.
You keep paying the mortgage, taxes, insurance and utilities with no rent coming in. Pricing to market, finishing repairs before listing and marketing widely are the best ways to shorten vacancy.
According to JMZ, the process typically takes 3 to 8 weeks from filing, depending on the court's schedule, after a 7 Day Demand for Possession is served.
No. In Michigan, removing a tenant requires a district court process; changing locks or shutting off utilities to force a tenant out is not allowed.
For $25 per month per door, it covers court filings, attorney time, one hearing and preparation of a Writ of Eviction if the tenant does not comply with the judgment.
No. JMZ Management does not charge a management fee while a home is vacant.
Vacancy and nonpayment are the two risks every rental carries. Know your carrying cost, keep a reserve, re-lease fast, act on late rent right away and follow Michigan's court process. At JMZ Management, your property is our business.
This article is for general information only and is not legal or tax advice.
Want help protecting your rental income? Get a free rental analysis or management proposal at jmzmanagement.com/freerentalanalysis or call 248-284-6990.
CONTACT US to learn more about professional property management in Michigan.