There are typical legal procedures needed to be conducted prior to handling the personal property of a tenant who abandoned your property and/or lease, and they vary from state to state. Please seek the advice of legal council in your area before you follow any advice given in this article.
I almost named this article Profiting From Your Tenants’ Abandoned Personal Property, but in most cases, tenants leave because they are behind on the rent and this lost rent almost always outweighs the value of the left-behind possessions.
As landlords, we need to pay our own bills and would greatly prefer the rent money over the personal property, but you also have to do the best with the situation that is presented to you.
As an investor in lower-income properties, I’ve bought homes where the people have seemed to just run out and leave nearly everything. I’ve also had a couple of instances where our tenant-buyers have abandoned nearly everything they own. (We typically avoid this issue as we always use the “cash-for-keys” method when it’s clear that the tenant-buyer will not be able to catch up on the rent.)
3 Ways to Benefit From the Abandoned Possessions of Your Previous Tenant
I’m going to give a few ideas of how to benefit from the abandoned possessions of your former tenants:
1. Selling The Possessions
Most of what we see in terms of possessions are low-value items like clothes, dishes, bathroom accessories, etc… For us, it’s not worth the time to sell these items at a flea market or yard sale although a hard-working individual may find some value in it.
I have sold some memory sticks of RAM on eBay for $150 and a trumpet for $120. Again, we lost way more in rent than these small gains, but every little bit helps, especially since they were so unexpected.
Related: Tenant Screening: The Ultimate Guide
2. Using The Possessions For Personal Use
I am proud to say that the coffee table that I’m using to sit my laptop on to write this article was abandoned by a former tenant. I’ve picked up a couple of other items as well like various tools and other outdoor equipment, mostly things that I don’t need but that I can’t pass up.
3. Donating The Possessions
While I might handpick at most a couple of items from each home that’s loaded with abandoned property, the rest of the stuff gets thrown away. It’s truly a shame, but it’s not worth our time to try to get $2 for each shirt at a yard sale.
However, I have heard from another investor who donates these items and receives a small tax deduction for each item that the charity can take. It should be as simple as hauling all the items to a local charity, providing an estimate of the quantity of each item, and receiving a tax receipt to help lower your business’s taxable income at the end of the year.
I will admit that I haven’t gone the donation route just yet but plan to do so the next time the need arises.
Before closing I do want to admit that I didn’t address any of the legal aspects, but be sure to follow your state laws in regards to abandoned property and consult legal counsel if necessary. The following article may be helpful in researching your own state’s processes.
Have you done anything creatively with your former tenants’ abandoned personal property?
Be sure to leave your comments below!