If you own a rental property but had a tenant trash it when they leave then make sure you read this article because we’re addressing the all-too-common problem that landlords have when they say, “Help! My last tenant trashed my Metro Detroit house!”
Do you own a rental property? Did you have a tenant leave it in less-than-perfect condition? It happens! In fact, it’s an experience that probably every landlord has faced at least once. If you looked at your empty rental property and said, “Help! My tenant trashed my Metro Detroit house” then here are some things you can do about it…
Is it worth going after the tenant?
You need to first assess the damage and decide if it’s worth going after the tenant. Unfortunately, it often isn’t worth the hassle because it may be a time consuming and even expensive effort to get the tenant to pay you back. However, if the damage is significant enough, you may choose to do this.
When a tenant causes damage to your property, it’s essential to evaluate the situation carefully to determine your next steps. Here’s a more detailed explanation along with examples to help you understand whether it’s worth pursuing the tenant for compensation.
1. Assessing the Damage:
The first step is to inspect the property and document all damages thoroughly. Take pictures, videos, and detailed notes. You’ll need this documentation if you decide to pursue legal action or deductions from the tenant’s security deposit.
Example: Let’s say a tenant has left large holes in the walls, broken windows, and caused significant water damage to the bathroom floor. The repair costs are estimated to be around $5,000. This is substantial damage, and pursuing the tenant might be worth the effort.
Conversely, if a tenant has left minor scuffs on the walls, a few stains on the carpet, or a broken door handle, and the repair costs are under $200, it may not be worth your time and resources to chase them for reimbursement.
2. Evaluating the Tenant’s Financial Situation:
Before going after the tenant, consider whether they have the financial means to pay for the damage. If they are unemployed, financially unstable, or have a history of not paying their rent on time, you might end up spending more money trying to recover costs than you’ll ever actually receive.
Example: If your tenant has lost their job and is struggling to pay rent, pursuing them for $1,500 worth of damages might not be worthwhile because even if you win a judgment in court, they may not have the funds to pay you back.
3. Considering Legal and Court Costs:
If you decide to take the tenant to small claims court, be aware of the associated costs, including court filing fees, attorney fees (if you choose to hire one), and the time you’ll need to invest in the process. Sometimes these expenses outweigh the potential recovery.
Example: Suppose the damages total $2,000, but taking the tenant to court might cost you $500 in fees and several hours of your time. You’ll need to decide whether it’s worth the trouble, especially if there’s no guarantee you’ll be able to collect the judgment.
4. Security Deposit Deduction:
In many cases, the simplest solution is to deduct the cost of repairs from the tenant’s security deposit. Ensure that you follow your state’s laws regarding security deposit deductions and provide an itemized list of damages and costs.
Example: If your tenant caused $1,000 worth of damage and their security deposit was $1,200, you can deduct the repair costs and return the remaining $200 (if applicable). Make sure to send a detailed statement of deductions to the tenant within the time frame specified by your local laws.
5. When Pursuing the Tenant Might Be Worth It:
If the damage is extensive and costly, and you believe the tenant has the means to pay, pursuing them might be worth your time and effort. In cases where insurance may cover the damages, you might also consider involving your insurance company to recover the costs.
Example: Suppose your tenant caused severe water damage that resulted in $10,000 in repairs. If they have a stable job, assets, or co-signers who are financially responsible, it could be worth taking legal action to recover the costs.
Is it worth repairing the damage?
From holes in the walls to missing toilets – we’ve heard of just about everything you can imagine! Sometimes a bit of drywall and paint will fix the problem, in which case you may want to fix it up and rent it out again, and then just accept the inconvenience as the cost of doing business. However, if the damage is not worth repairing yourself then you might be interested in a couple of other options:
You could rent your house to a handyman
One little-known option that is actually really helpful is to find a handyman who wants to rent the house. In exchange for a discount on rent (or even free rent) they can fix up the house for you to make it a nice rental property again. Make sure you have a timeline all spelled out, though, to avoid then staying too long without a lot of work getting done.
You could sell the house
Another option is to sell the house and move on from owning a frustrating rental property. However, be aware that if you try to sell the house on the open market, you may have to fix it up first in order for the agent to list it. Another option is to sell privately to a house-buying team like ours. (We buy houses in as-is condition and we’ll fix them up ourselves).