What a non-paying tenant costs a Freeport 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 three-bedroom estate sale on North Long Beach Avenue. A four-bedroom on Westside Avenue. A four-bedroom on Laurel Road. All of them in Freeport, all bought by us.
Freeport is roughly 43,713 people in Nassau County, ZIP 11520, and the housing stock is mostly cape cod, ranch, colonial. Around Freeport Nautical Mile and Freeport LIRR station, most of it is old enough that the mechanicals are on their second or third life. The Freeport stop pulls buyers who commute, which supports the good houses and does very little for the ones that need a roof. We have bought enough here to know which streets take water, which blocks still have oil tanks in the ground, and what the Freeport Public Schools does to a resale price.
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
Listing a house with a non-paying tenant the usual way brings each of these costs with it. Selling to us brings none of them.
- Agent commission
- $33,000 at 5% of the Freeport median none
- Seller closing costs
- About $13,200 on a $660,000 sale. We can cover these. none
- Repairs to make it listable
- Whatever it takes to make it listable, paid in advance none
- Cleanout and removal
- Dumpsters or haulers by the load, ahead of any viewing none
- Carrying costs while it waits
- Taxes, insurance and utilities across the 92 to 107 days it takes to find a buyer and then wait on their lender 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 Freeport
These are the two routes open to you with a house with a non-paying tenant, priced against what Freeport houses actually sell for.
Work it against Freeport's own numbers. The median sale here is $660,000. A 5% commission on that is $33,000, and seller closing costs of about 2% add roughly $13,200. Those are costs we can cover on our side. That is $46,200 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 Freeport the median house takes about 47 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 92 to 107 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 | $660,000 (Freeport median) | Our written offer |
| Commission | −$33,000 | None |
| Seller closing costs | −$13,200 | We can cover them |
| Repairs before listing | Out of pocket | None |
| Cleanout | Yours | Ours |
| Showings | Until it sells | One visit |
| Listed to signed contract | 47 days (Freeport 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 | 92 to 107 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 | $613,800 | The number we put in writing |
The agent column uses a 5% commission and about 2% of seller closing costs, which are typical rather than fixed. It leaves out repairs and holding costs because no two houses are alike there. Where a house is in good condition, listing with a capable agent can beat our number, and we will be upfront if that is the case.
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 Freeport sold for $660,000 and took about 47 days to go under contract, then another 45 to 60 days waiting on the buyer's mortgage. That is 92 to 107 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 Freeport 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?
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 Freeport 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.