You know there’s a risk involved in owning residential real estate and renting investment properties out to tenants. It’s rare that this happens, but you might end up with thousands of dollars in damage left behind by a tenant who seemed reasonable and responsible.
Protecting your investment property from tenant damage requires good screening, an adequate security deposit, routine inspections, and an insurance requirement.
Here are the best tips we can provide as a St. Louis property management company.
St. Louis Tenant Screening
Avoiding property damage starts with good tenant screening. It’s a proactive way to reduce the likelihood of having a bad tenant make a mess of your property.
Establish some consistent criteria for the residents you’ll accept, and stick to that criteria when you’re screening. While it’s important to evaluate financial information and criminal histories, make sure you pay attention to rental history. You want to talk to current and former landlords. Find out if there was any damage left behind or even excessive wear and tear. Ask about whether the prospective tenant was given a full security deposit refund.
Collect an Adequate Security Deposit
Collecting a security deposit is an important part of protecting your property against tenant damage.
You cannot deduct the cost of normal wear and tear from the tenant’s security deposit, but you can deduct the damage you need to address after the tenant vacates. If a door is ripped from its hinges, you can use the security deposit. If floors and walls are scratched and damaged, you can use the security deposit to replace them.
Collect a security deposit that’s high enough to cover any potential damage that’s left behind after a tenant moves out. Most tenants expect to pay the equivalent of one month’s rent.
Conduct Routine Property Inspections
A thorough move-in and move-out inspection will allow you to document your property’s condition before and after the tenancy. Make sure you take a lot of pictures and record detailed notes.
We also recommend you inspect the home once during the tenancy. You’ll be able to look for deferred or unreported maintenance issues that can lead to damage. You’ll also have the opportunity to talk with your tenants and make sure the lease is being followed and the home is being kept clean.
When tenants know that you’re going to inspect during the lease period, they’ll be less likely to cause damage. It’s a good way to protect your property.
Renter’s Insurance for St. Louis Tenants
Renter’s insurance benefits your tenants because it covers their personal belongings.
If a tree crashes through a window during a bad storm and their electronics are damaged, they’ll need renter’s insurance to cover the replacement cost. More importantly, there’s also a liability element to renter’s insurance policies. If your tenant causes damage, your property insurance would cover it, but if it’s the tenant’s responsibility, they should be held accountable by paying for it with their own policy. This will keep your premium lower and your claim report clear.
Sometimes tenant damage is intentional, but often it’s due to simple neglect. One of the best ways to reduce the risk of property damage is to work with a professional St. Louis property management company. Risk management is only one of the services we provide. Please contact us at Amoso Properties.