What To Do When Tenants Cause Damage – We Have You Covered
What happens when it turns out that your tenant is not the best sort of tenant? What if they cause damage to your property? What if they break rules and contravene the terms of the lease agreement? A lot of real estate investors worry about bad tenants. It is not unreasonable to do this. However, you can rest assured that things will get looked after when you’ve opted for the Remote Control Retirement Riches formula that so many other investors have used.
A bad tenant is not your headache.
So you have a tenant who breaks things or makes alterations they aren't supposed to or causes some other type of damage. What do you, as a landlord do? Well, you do nothing. This is because you’ve done the smart thing by engaging a property management agency to look after the property, deal with the tenant, documentation etc. It is the job of the property management firm to take care of the wayward tenant. The property manager will deal with the tenant and ensure that your loss is made good.
The options available to a tenant would depend upon the state laws within whose jurisdiction the property is. Most states have very fair and balanced laws that equally favor the landlord and the tenant. I'm not talking about New York and California, but then we don’t advise you to invest in these states anyway.
So there are laws in place to protect the rights and interests of property owners. The owner is entitled to make good any loss or damage using the amount of security deposit paid by the tenant. If this is insufficient and the damage is more extensive, there is the option to approach the small claims court for compensation. Garnishing of wages may be another possibility.
The Remote Control Retirement Riches formula.
All this sounds like a lot of work, a headache really! But here’s the best part, this is not your headache as a landlord. It is the job of the property manager to deal with the tenant, to recover the damages, to deal with the attorney and the court and so on. Property management firms typically have attorneys who deal with this sort of thing, so that it isn't your headache.
And that is why we call it the Remote Control Retirement Riches formula. You as an investor could be in any part of the country – even the world, and your real estate investment is looked after for you. You don’t have to deal with the issues that typically crop up between a landlord and a tenant because you have competent people to do this for you. At ICG Real Estate we have devised a formula that requires you, as an investor, to do nothing!
If you would like to know more about securing your future and the future of your family, reach out to us at icgre.com. We have helped thousands of investors create not just financial security but wealth for themselves with the help of real estate investments. Sign up for our updates or attend one of ourOnline Expo events. You have nothing to lose and a lot to gain!
The Security Deposit Takes Care of it in Selected Cases.
I have been saying for many years that property investments are your best bet for what I call“remote control riches.” You take a loan to buy a house, rent it out, and then sit back and earn rent that helps repay that loan – creating wealth for you in the long run. Whether you invest in one house or ten houses, you have the pride of ownership and you want your property to be well looked after and in good shape. However, a lot of investors wonder – what if the tenant damages the property?
Difference between damage and regular wear and tear.
Let me just clarify here, that the various states in the United States do have different laws and regulations pertaining to tenancy. However, some things are more or less uniform. Regular wear and tear is something that is recognized in most states and is permitted as being a part of day to day use of a property. So, if a tenant hammered a few nails to hang up some pictures, for instance, this is usually OK. Everyday use and such reasonable modifications are generally not considered‘damage’.
However, if there is damage that results out of unreasonable actions of a tenant, or some extreme modifications made to the property, the tenant is bound to pay for these. Typically, tenants will ensure that the house is in decent shape when they vacate it, because of something called the security deposit. When the landlord and tenant enter into the lease agreement, the tenant is required to put down a security deposit for exactly this reason – possible damage to the property. If there is substantial damage, this can be paid for from the security deposit amount. The tenant will receive their deposit amount minus the costs incurred towards repairing the damage.
Legal recourse available to landlords.
However, what if the damage is extensive and the costs incurred are higher than the security deposit? Well, in that case the property owner has recourse to the small claims court. Typically, the court will award damages in favor of the landlord. In cases, it can happen that the damage is significant – more than the security deposit amount will pay for and then the tenant goes missing. When the tenant absconds, the court can award suitable compensation to the landlord, in cases even ordering the garnishing of wages.
So, if you are a real estate investor and landlord(or are planning to assume this role), you don’t have to worry about tenants causing damage to your property. A vast majority of tenants would rather not endanger their security deposit or blot their copybook as a tenant, and will keep the premises in good condition. If they do not, there is always legal recourse available. In the end, these are just minor speed bumps on your road to retirement riches.
ICG uses single-family home investments, bought in advantageous locations and the best U.S. markets. We enable you to enjoy the clout that comes from purchasing a multitude of houses, even if you only buy one.
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