Real estate investing does not always go to plan. Inevitably, there will be odd occasions when — after buying real estate – you have tenants who end up damaging it. The way you deal with this, once you become aware of it, will greatly influence the outcome of the process. Suffice to say, a security deposit is essential to cover any unforeseen repair bills. However, the fact that you are in possession of these funds does not mean that you are allowed to spend them anyway you choose. Although damage has been done, you still have to record the steps you take and adhere to some vital rules, before carrying out any repair work. In the absence of the correct paperwork, you are leaving yourself vulnerable to legal action, regardless of whether you are in the right. The following five tips will help you to cope with rental property damage.

Photographs of the ‘Before’ and ‘After’

The initial part of addressing real estate damage begins long before any problems are discovered. When your tenant first starts renting real estate, you ought to document the property’s condition. Make sure that you take plenty of photographs (and video footage if possible), then send these to the tenant for verification. This is a key measure to safeguard you when the lease period ends. As soon as you discover a problem with the house, you should document it. If you notice some damage while you are doing a routine visit halfway through the lease, drop everything and take some photos on your smartphone. Providing the photos are clear, with time and date stamps, you have sufficient ‘proof’ to take further action. It might be sensible to store a good quality camera in your vehicle, so you avoid any disputes about the legitimacy of the photos.

Inform the Tenant Immediately

After you have compiled your documents, you should get in touch with the tenant. Picking up the telephone and praying for a desirable outcome is not going to cut it. A telephone call might be a suitable starting point, however you have to email your tenant and perhaps send them an official letter too. At this point, the aim is to demonstrate that the tenant knows about the problem. In the majority of instances, the tenant will acknowledge blame and seek a solution. Occasionally, tenants will say that they knew nothing about the damage and did not cause it themselves. If you send a letter or email to them, with the time and date clearly marked, you can prove that they are aware of the issue. You might have a model tenant, however once they realize that they could lose money, they might try to cover up their actions. If they opt to file a lawsuit against you to recover the security deposit, you can show that they knew about the situation.

Explain the Repair Costs

Before contacting the tenant, it is best to line up some contractors who can give quotes for the repair work. Usually, once you tell them that repairs need to be carried out, tenants will want to know how much they have to pay. They might say that they can do the repairs, or that they can get a friend to do them. If they are not insured and licensed though, this is not something that you should agree to. If you allow an unqualified person to carry out the repairs, you might be just covering up the problem superficially. Endeavor to obtain a few quotes, so the tenant will have no basis to claim that the contractor is a friend of yours. For all the quotes you request, make sure that you get everything written down and presented as clearly as possible. Provide the tenant with these quotes and tell them you will choose one and have the repairs completed. Do not allow repair work to be delayed, just because the tenant says that they can get the work done cheaper.

Photographs of the ‘After’

Usually, damage to property caused by tenants is found near to the end of lease periods. Often, it comes to light when the last inspection of a property is made. This leaves you in the difficult position of having to get repairs completed, while conducting property views or arranging for new tenants to move in. In all likelihood, your previous tenant will be annoyed and try to get their security deposit back as quickly as they can. Once the repairs are finished, you need to take several photos then send these to the tenant. Do not return their security deposit to them, until they acknowledge receipt of your photos.

Provide a Detailed Security Deposit Invoice

When everything is repaired, you can contact the tenant to give them their security deposit. Needless to say, at this stage there might be some sore feelings and hurt pride. You are well within your rights to request payment, if a carpet is stained or a cupboard door is damaged. Most tenants believe that these things are minor and amount to ‘wear and tear’. Therefore, they will accuse you of being pernickety if you insist on getting these fixed. In reality though, these small expenses quickly accumulate if you fail to recoup them. Unless you are diligent, it won’t be long before you have a repair bill for hundreds of dollars, which will eat into your bottom line. While you are perfectly entitled to deduct money for this, it is always best to finish a lease agreement on amicable terms where possible. Rather than sending the check to the tenant by post, you could request a meeting at the house. This enables them to receive their check faster, and it offers you one last opportunity to leave on friendly terms.

There’s no getting around the fact that, sooner or later, as a landlord you are bound to encounter damage to your property. The key thing is to remain calm and have an action plan in place, so you know how to react. Take heed of the above advice and the process will not seem so daunting.

No Cost 30 Minute Strategy Session

Enter your information below and we will schedule for a no cost and no obligation 30 minute strategy session with our team. We will discuss what your goals are and how we can help you achieve them faster!  If you like what we have to offer we will move forward if not then we will find something else that works for you!

You have Successfully Subscribed!

No Cost 30 Minute Strategy Session

Enter your information below and we will schedule for a no cost and no obligation 30 minute strategy session with our team. We will discuss what your goals are and how we can help you achieve them faster!  If you like what we have to offer we will move forward if not then we will find something else that works for you!




You have Successfully Subscribed!

Request a FREE Strategy Session!

We'll sit down, understand your goals and see where we would be a good fit to help you achieve financial freedom with real estate

You have Successfully Subscribed!