Friday, 19 May 2017

Four tips to recoup damage to a rental property


You’ve worked hard to provide your rental tenant with the best rental property for their money. Then the day comes when you and your current tenant have parted ways, you come to inspect the property and discover things just aren’t what they should be. There’s something wrong with the property, you enter to discover trash is thrown all over and what’s that smell? On further inspection, you discover holes in the walls with a smell that seemly has infected every single space. It’s going to take serious cleaning to get the property back in tip top shape.

Your former tenant did provide a deposit, but from the looks of the property now that deposit just isn’t going to cover the damage the home has got. What can you do to recoup for these damages while still making a profit off the site? You’ll need to remember and understand that each situation is different, but sometimes it can be done.

The options you have will depend on three factors: 
  • The amount of money owed 
  • Tenant type 
  • Situation where the property became damaged

There are four quick tips to consider when you’re considering how to pay for property damage done by a former tenant:

Negotiate 



A tenant who does damage to a rental property can be sent a disposition of deposit form that states that the deposit has become landlord property to cover the cost of the damage while also allowing a negotiation on costs that come beyond the regular deposit amount. Be aware that you’ll need to have complete Move in/Move out inspection documentation plus photographic proof of the before-and-after state of the property.

Accept a small loss

If the damage isn’t major but goes over the deposit amount you may just choose to accept the loss if the former tenant is unwilling to cover it. Accepting a small loss can help avoid headaches that chasing up the amount may create. If you’re accepting the loss, file the unpaid invoice under the former tenant information that can be presented to another landlord as a statement to the quality of tenant they might be considering.

Bill em

If you’re not wanting to accept the loss, you can begin to bill the former tenant repeatedly with a monthly bill for the amount owed. Cycle billing is a way to avoid large cost involved in regaining the money.

Send to collections

There are several collect agencies available to pursue past bill payments that use several different techniques in an attempt to recoup the money. But, you should aware that collection services can charge a large fee for recouping money owed, often at almost fifty percent of the money owed. If you choose a collection agent to recoup money owed, consider it only if the tenant owes over $1000 due to the collection agent fee. 


It’s not always easy to recoup on damage done to a rental property, but it can be done. So, consider all your options for payment and you’ll be on your way to recouping the money you need.

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