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How to Offer Cash for Keys in 4 Steps

Jerry Norton

Feb 14, 2024

white and red wooden house miniature on brown table

Owning a rental property comes with many advantages: passive income, appreciation, tax advantages, and much more.

But one of the most challenging aspects of experiencing these advantages and owning a rental property can be tenants. 

By thoroughly screening tenants, you can rent to good people who have consistent income. Plus, they'll maintain the condition of the property well.

But every once in a while, a tenant may come through who doesn't take care of the property, is late on rent, or — worst of all — stops paying rent all together and refuses to leave the property. 

With your bills needing to get paid, what can you do? 

You can decide to initiate eviction proceedings, but eviction can take a long time — and be costly.

There is an option that can motivate a tenant to vacate your property. Plus, it's cheaper and faster than eviction.

We're talking about cash for keys.

In this article, we’ll break down:

  • What cash for keys is
  • The 4-step process for offering cash for keys
  • Cash for keys templates you can use today
  • And more

If you're ready to learn everything you need to know about cash for keys, let’s get started! 

What is Cash For Keys?

Cash for keys is an agreement between landlords and tenants where the landlord offers money to the tenant in exchange for the tenant to vacate the rental property.

It’s a win-win for both parties: you as the landlord get your rental property vacated, and the tenant receives income to help in the transition process. 

Best of all?

Cash for keys is completely legal!

Advantages of Cash for Keys for Landlords

Avoiding the Hassle (and Costs) of Eviction

Let’s be honest: evicting a tenant can be time-consuming and costly. 

Not only can eviction cost thousands of dollars due to court fees and legal expenses; by having a tenant in the rental property not paying monthly rent, you as the landlord are losing money each month. 

By utilizing a cash for keys agreement, you can bypass this process altogether, saving time and avoiding legal battles. 

Cash for keys truly is a peaceful resolution that allows you to regain control of your property efficiently.

Preserving Property Condition

When tenants are faced with eviction, they may feel resentful, leading to potential and costly property damage.

By offering cash for keys, you can incentivize tenants to leave the property in good condition. 

This can include:

  • there is no exterior or interior damage
  • ensuring that all appliances are working
  • any outstanding repairs the tenant previously agreed to address are taken care of

Maintaining Positive Landlord-Tenant Relationships

Eviction proceedings can create animosity and resentment. On the other hand, cash for keys offers an opportunity to maintain a positive relationship.

Why is this important?

Well, if you have multiple properties or plan to continue renting in the same area, a cash for keys agreement can help maintain a positive reputation — and attract future tenants.

The Cash for Keys Process

Next, we'll take a look at the cash for keys process step by step.

Step 1: Serve a Notice

Once you have posted or provided a violation notice — if the tenant is still in violation of their lease — you can begin the cash for keys process. 

While you are not required by law to provide your tenant with an eviction notice before starting the cash for keys process, it can help lay the groundwork for what’s to come: either a mutually beneficial cash for keys agreement, or a lengthy and expensive eviction. 

2) Offer Cash for Keys

Cash for keys isn’t a negotiation; you as the landlord should have a firm number that you can provide the tenant to vacate the property. The amount will depend upon:

  • The cost of an eviction in your state
  • What you would lose (or are losing) in rental income 
  • Potential property damage that the tenant could cause
  • How long the tenant has been at your property
  • How many months it will potentially take for the tenant to find housing

For example, you could offer:

  • Half of one month’s rent
  • Relocation expenses
  • The original security deposit 

In total, this might amount to $2,000 and $4,000.

The offer should be high enough that it’s attractive to the tenant, but at the same time, low enough so that you aren’t losing money you need in the process.

Along with the cash for keys amount, you’ll also need to provide the tenant with a move out date.

With the move out date, you want to be reasonable. Depending upon how small or large your rental property is, how many days will it realistically take the tenant to vacate the property?

Once you know the cash for keys amount and move out date, the next step is to put it in writing.

3) Create a Written Cash for Keys Agreement

In the cash for keys agreement, it’s important to have the following spelled out: 

  • The amount of money you are paying the tenant to vacate the property
  • The specific date the tenant is vacating the property
  • The condition you expect the property to be in
  • That the tenant is exchanging their right of occupancy for cash
  • That an inspection will be conducted on the tenant’s move out date
  • Signatures of both parties 

4) Conduct an Inspection When the Tenant Vacates the Property 

The final step in a cash for keys agreement is to ensure that the tenant upholds his end of the contract by conducting a thorough inspection of the property. 

Once the inspection is complete, you as the landlord can hand the tenant his cash, and the tenant can hand you keys.  

Cash for Keys Agreement Templates

If you are looking to create a cash for keys agreement, or you want one to have in your back pocket, here are a few helpful resources. 

The Bottom Line: Cash For Keys

Cash for keys is a mutually beneficial solution for landlords and tenants alike. 

Instead of the costly avenue of eviction, cash for keys can be far faster — and far cheaper. 

While it’s important to know, as a landlord, you don’t want to find yourself in a situation with eviction or cash for keys. 

This is why it’s so critical to screen tenants thoroughly. 

Strive for low tenant turnover and quality tenants, because doing so will not only take care of your investment, but it will also reduce the stress burden on you.