Tenant Damage to Property: How to Prevent & React to Rental Property Damage

Have you ever had a tenant damage your property? If not, count yourself lucky.

As a landlord, the more important question is “How can I prevent tenant property damage?” And, if the worst happens, how do I handle tenant damage to property?

How to Prevent Tenant Damage to Property

The best way to deal with tenant damage to property is to prevent it before it happens.

But how do you do that?

Screening Tenants

First, choose your tenants very carefully. The most important thing you do as a profitable landlord is to choose the right tenants. And no matter how good you are at it, sometimes you will fail.

If you have good tenants, particularly in an apartment building, let them know when a unit is available and ask them to refer their friends. Tell them “I would like more good tenants like you! Do you have friends who are also responsible and financially capable of renting my unit? Someone you would like to have as a neighbor?”

Even if they don’t know anyone to suggest, you have given them the blessing of appreciation.

But referrals alone don’t guarantee good tenants. Always run a full tenant credit report, criminal background check, and eviction history report on all rental applications. I have found that the worst people sometimes make the best talkers. They know how to fleece you because they have been doing it for years.

Once I had a prospective tenant who made a deposit on a single-family house, and I thought it was rented to a good tenant. When I did a background check, however, I learned he was a month behind on his rent with his current landlord. The amount he owed closely corresponded with what he paid me. As it happened I knew the landlord. He was a banker I had dealt with. I called and learned the tenant had not paid his last month’s rent.

When I confronted the prospective tenant he admitted he used his next month’s rent to pay the deposit to me. He didn’t have the money. I returned his holding deposit but not the cost of the background check.

That background check and a call to his current landlord saved me so I did not rent to an obviously problem tenant. Would he also have trashed the property? There is no way to know except to look at past behavior. If they were bad tenants with their current landlord I would be foolish to expect anything different.

Charge a High Security Deposit

Security and pet deposits protect you in several ways. Most obviously, they offer a cash reserve you can use to repair tenant damage to the property.

But they also serve as an indications of an applicant’s financial fitness. If your prospective tenant can’t afford a security deposit plus the first month’s rent (and possibly the last), they aren’t financially secure. They are living on the edge financially, and the first problem they run into will put them underwater. And for financially troubled tenants, the rent is often the easiest place to cut.

I have occasionally made exceptions and allowed tenants to pay the damage deposit in installments after moving in. It always worked out badly. I had to learn the hard way that you have to operate your rental business like a business, with strict rules in place.

Charge for Pets

The same logic applies to pet deposits. I formerly charged a $100 non-refundable pet deposit and an additional $30 monthly rent per pet. (Some states and cities don’t allow additional rent for pets, so double check your local laws.)

My daughter, a pet lover and real estate investor, taught me an important lesson. When she learned I only charged a $100 pet deposit she said,

“Dad, that’s not enough. Responsible pet owners appreciate being able to rent where their pets are welcome. They are glad to pay pet rent and a higher pet deposit and it tells you they will be good tenants. You should charge at least $300.”

I changed immediately and it worked out exactly as she said. Previous to the $300 pet deposit I often had problems of pet damage. It was so bad I almost quit accepting pets at all. After raising the non-refundable pet-deposit I have seldom had pet damage problems.

Add a Cosigner

If you consider renting to applicants with no credit, bad credit, or borderline income, ask for a cosigner on the lease agreement.

For instance, many college students and grad students haven’t had time to build sufficient credit. The same goes for recent immigrants to the US. By asking for a lease cosigner, you add another layer or security against them defaulting on the rent payment — or leaving rental property damage.

Because if the tenant damages your property, you can not only go after them for the cost, but also the cosigner.

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Property Insurance & Rent Default Insurance

Your landlord insurance policy will cover some types of tenant damage to property. Ask your insurance provider about exactly what they cover, and try Sure for comprehensive landlord coverage.

But don’t stop at traditional rental property insurance.

While popular overseas for decades, rent default insurance is finally available in the US. For a few hundred dollars a year, you can insure your rental income: if the tenant stops paying, the insurance kicks in to pay you rent until you can evict the tenant.

Because if you file to evict a tenant for damage to the rental property, you better believe they’ll stop paying the rent.

Be Responsive for Property Repairs

When a renter calls you about a problem — a drippy faucet, a hole in a screen, or worse, a roof leak, express appreciation to them for letting you know so you can prevent it getting worse. When they hear this each time they contact you, it encourages them to be better tenants. You appeal to their best self and helping them to be better people. They will try to live up to your good opinion of them.

I begin this when I interview prospective tenants. I might say:

“I almost never hold security deposits when tenants leave, and I like it that way. It means I chose well and was blessed with good tenants.”

Most people want to be good tenants and will try to measure up. You challenge to them to be the kind of tenant that always gets their full deposit back. Those kinds of tenants do not damage your property.

Express appreciation to your good tenants. Such words actually convey something intangible that is, nevertheless, very real.

How to Respond to Tenant Damage to Property

If the tenant is an otherwise good tenant and you see damage for which they are responsible, deal with it immediately. Some landlords advise the first communication should be in writing, but I prefer to begin face-to-face.

Set the initial tone of the conversation as non-confrontational and kind. Listen to them when they respond. Be firm, however, and explain the damage goes beyond normal wear and tear, must be repaired, and it will be at their expense. Let them know you value them as a tenant and this is not their normal behavior, so you would like to resolve it in a way that lets you continue working together as landlord and renter.

Remember, most tenant-caused damage is accidental damage. People make mistakes, and while you must hold them accountable, that doesn’t mean you need to bring emotion into the mix. But if your tenant causes intentional damages, file for eviction immediately.

Consider Filing Insurance Claims

If the tenants move out without paying for the damage, and repairs cost more than the security deposit, consider filing a property insurance claim. Just beware that it may drive your premiums higher.

If you have to file for eviction against the tenant, file a claim with your rent default insurance.

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Document When a Tenant Damages Property

Make sure you keep “before” pictures (such as the ones you use for advertising rental units) and then take “after” pictures of the damage. If you must go to court they will be very helpful.

It also helps to get a written estimate for the cost of repairs. Take this estimate of repair costs to court with you to showcase the extent of the tenant damage to property.

I’m a small-time landlord, so I usually do my own evictions. With the first one I faced I used an attorney. I watched and learned and then did it myself unless it was a very troublesome tenant. In a situation like that a good attorney is well worth the money.

If you go to court, dress well. It shows respect for the judge and it gives you an psychological advantage if the tenant shows up looking irreverent. It also prevents the tenant having an advantage if they show up looking like an attorney and you look like the bum!

Consider Suing for (and Collecting) a Judgment

Even after you evict a tenant for rental property damage, you have to file separately for a money judgment for the tenant damage to property.

Then once you win that, you have to go about actually collecting the judgment. That often means hiring a collection agency, who then tries to garnish the debtor’s wages, or attach a lien to their car.

Which may or may not be worth it, for the amount of tenant damage to property.

The Landlord Business Is a People Business

In a sense, your most important asset is not your investment property, but your tenants. Because the quality of your tenants determines the quality of your returns, and bad tenants can destroy your property entirely.

If you have a rental property with no tenants, or worse, bad tenants, your property is no longer an asset. It then becomes a liability. You need good tenants to accomplish your goals, so aim to keep the good ones and non-renew the bad ones. Let good tenants know how much you appreciate them!

Landlords provide a crucial societal need. You deserve to earn a strong return based on your investment, effort, and expertise. However, you have no union to protect you or your property — you need to protect yourself.♦

How do you prevent tenant damage to property? How do you respond to rental property damage when it happens?

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About the Author

Rick bought his first rental in 1998, a four-unit FSBO. The seller carried owner financing with only $10,000 down on a $125,000 property. Eight years later he refinanced and pulled out a down payment to buy a severely mismanaged, under-maintained eight-unit bank repo. After 14 years of self management and improvements, he increased rents 400% and sold it. He currently owns two four-unit multifamily properties.

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