What if my tenants TRASH the place?

[TodorYordanov]

Many new and veteran investors have this fear that sometimes keeps them up at night or prevents them from making a decision.



What if they trash the place?


We, Mike and I, have seen enough in our business to speak to this fear.


Just last month we had to `clean up` one of those messy situations and it turned up quite well.





So when you think ` `What if they DESTROY the place?`


Did you have something like this in mind?



Click here to see pictures and the rest: http://www.proactinvestments.com/?p=477



I am going to be honest with you: You are going to be feeling sick after you see this to your property for the first time. And that`s OK.
Good news is it is NOT normal!


Another good news is that there are ways that this can be prevented by selecting the right tenants and some of the risk can be mitigated by having the right insurance.


In this particular case the tenant was inherited from the previous owner and there were some early signs that trouble was about to happen.

Unfortunately, as a landlord, there is very little one can do proactively in Ontario. However comunication is key in all situations. Regardless of what the issue is, try to have open lines of communication with your tenant at all times. This is one way of receiving valid clues on what their intention is and what direction they are planing to move.

I need to repeat this again: This is not what happens to all places!


In this particular case the insurance protected the property owner from vandalism and covered almost all of the cost for renovations and lost rent.


Instead on dweling on fear here is the action plan:


1. Have the right insurance in place for rental places.


2. Have the right team to deal with situation.


3. Serve the proper paperwork to tenants.


4. Don`t be afraid. Take massive action. Clean up the mess and continue with the business.


5. Find better tenants.





DO NOT BE AFRAID. TAKE MASSIVE ACTION.


This is exactly what we did. We renovated it, put it back on the market and within 2 weeks placed a nice couple who loved the place and will will take care of it while paying rent.

px; margin-right: 0px; margin-left: 0px; padding-right: 0px; padding-left: 0px; font-family: tahoma, arial, sans-serif; font-size: 13px; background-color: #ffffff;">The renovation cost little over $4000 and was mostly covered by insurance.

 

[housingrental]

See if the police are interested in the tagging info

 

[kir]

[quote user=TodorYordanov]
The renovation cost little over $4000 and was mostly covered by insurance.










So was the damage and renovation mostly consist of taking down bad drywall; prime, and paint?

Seems like an easy fix.



Kir.

 

[bizaro86]

[quote user=kir]So was the damage and renovation mostly consist of taking down bad drywall; prime, and paint?

Seems like an easy fix.



Kir.



Maybe the pictures didn't do it justice. I personally wouldn't have thought that was $4000 worth of damage. But there could have been something hidden that was costly. If someone gets quick dry cement down your plumbing, you're in trouble (eg).



Michael

 

[invst4profit]

The key to being prepared for situations like this is to thoroughly screen applicants and have hard and fast standards for selecting tenants. Unfortunately inherited tenants are usually the biggest source of concern.

It is essential that applicants provide SI# as a condition of tenancy. Credit reports on all applicants are necessary and a full time employment history with the same employer for several years as a bare minimum. Screening may not eliminate all risk but choosing the right tenants will allow you financial compensation in court. The tenants you want are the ones you know can pay not necessarily just the ones that have first and last.

None of this guarantees a tenant will not damage your property if you are forced to evict but it will insure you will be able to collect through Small Claims Court when necessary. This would possibly be better than having to make a insurance claim and would probably be necessary anyway to collect rent owing.

It's nice to have insurance coverage but not so nice when you are forced to make claims if it results in higher premiums. Better to make the guilty pay.



One word of warning is that increasingly in Ontario landlords are avoiding renting to those on government assistance (welfare or ODSP) as the government has declared those individuals to be untouchable. Their income may not be garnished and as such they are not held responsible for any debts. For those tenants insurance coverage would be your only protection



The question is who provides insurance to cover tenant damage and what does it cost.

 

[TodorYordanov]

Few more details on this:



The tenant was a young underage person on some type of assistance, paying very little if anything in rent. like I said and inherited from the previous owner.

The renovation included new from doors, windows, floors and all interior doors on top of drywall and paint.



The police were not involved as this would have complicated the case without any monetary benefit to us or our client.



Again, having the right insurance and communicating with the tenant and his worker untill he moved out were a major factor that this was a "small" nightmare.

 

[invst4profit]

Are you saying you actually had assistance from his case worker. This is extremely rare. Usually they take no responsibility what so ever for there clients actions and refuse to speak to landlords. You were indeed lucky.



Again I highly recommended landlords avoid taking tenants on assistance simply as a pro active screening tool. It's generally easy to legally reject them due to the fact that the vast majority have deplorable credit scores.