Tenant moved out and so did the mechanical equipment... more....

98 Replies

Recent tenant eviction, although they are rare in my world, they do occur once in a while, this one was like no other one before, tenants of (3) years, stopped paying the rent, we had to evict the tenant, the tenant moved out and took:

  • Toilets
  • Vanities
  • Furnace (yes, they disconnected the gas line and the dedicated electrical circuit)
  • Hot Water Tank (yes, they capped the water lines ( so, thank you for not flooding my home))
  • Kitchen Cabinets (Including the kitchen sink .... hahaha)
  • Kitchen Appliances

Aside from the regular move-out items and small repairs, this was new to me, they did not really vandalize the home, but they stripped it, which is kind of awkward, I thought about making an insurance claim, but now I am thinking just pay to replace the items and move on, the time, effort, money, and delay will outweigh I think the potential for the home going back on-line and getting back to cash flow positive.

Thoughts and ideas welcome. 

If it were me I would file a police report and then file an insurance claim.  That's what insurance is for, let your insurance company go after them.  Meanwhile you'll end up with a nice newly updated property, you can raise the rent.

If you let them take you for a free ride it also just encourages them to abuse the next landlord.

Wow! Definitely get law enforcement involved.

And I assume you have a reputable insurance company, you can file a claim and they should take care of you.  It should not take that much time at all.  They will send an adjuster in a day or two, and then they will link up their pics with your statement and the police report, it's pretty cut and dry.

Double check, you might also have lost rent coverage.

If you replace items valued higher than the insured value you'll have to pay the difference, which might be worth it anyway for the higher rent and higher ARV.

Originally posted by @Tyler Mullen :

If it were me I would file a police report and then file an insurance claim.  That's what insurance is for, let your insurance company go after them.  Meanwhile you'll end up with a nice newly updated property, you can raise the rent.

If you let them take you for a free ride it also just encourages them to abuse the next landlord.

It is something I am weighing, I am just thinking about the ramifications, having a sizeable portfolio does it make sense recording the claim, paying the $1500 deductible - claim as theft ?  Have had what I thought experienced everything you can possibly encounter, this is something new. 

Originally posted by @Sam Carroll :

Wow! Definitely get law enforcement involved.

 Super strange issue seems like an outlier and another one of those good bar stories.

Originally posted by @Tyler Mullen :

And I assume you have a reputable insurance company, you can file a claim and they should take care of you.  It should not take that much time at all.  They will send an adjuster in a day or two, and then they will link up their pics with your statement and the police report, it's pretty cut and dry.

Double check, you might also have lost rent coverage.

If you replace items valued higher than the insured value you'll have to pay the difference, which might be worth it anyway for the higher rent and higher ARV.

Yes, I do have a reputable carrier, I think I may have the loss rent rider, not sure will need to check if I have ARV

Two toilets = $400

Two vanities = $800

Furnace = $2,000

Hot water tank = $1,000

Kitchen cabinets and sink = $3,000

Kitchen appliances = $2,000

You're looking at approximately $9,000 in losses. Why would you willingly eat the cost and let the criminal go free? if that's the way you do business, please hire me as your accountant!

Seriously, you should press charges immediately. You should have all the tenant's information so law enforcement can track them down quickly. Even if you don't recover your stuff, the criminal should be punished and it would save some other Landlord from falling prey.

Please keep us updated ... super intriguing situation .. I’m usually the one on your end of these deals!

Originally posted by @Steven Gesis :
Originally posted by @Tyler Mullen:

If it were me I would file a police report and then file an insurance claim.  That's what insurance is for, let your insurance company go after them.  Meanwhile you'll end up with a nice newly updated property, you can raise the rent.

If you let them take you for a free ride it also just encourages them to abuse the next landlord.

It is something I am weighing, I am just thinking about the ramifications, having a sizeable portfolio does it make sense recording the claim, paying the $1500 deductible - claim as theft ?  Have had what I thought experienced everything you can possibly encounter, this is something new. 

F all the noise.

File 1099-C as “forgiven debt” for all they took  + all the unpaid rent + eviction fees.

Let the IRS throw em in jail for tax evasion. You’re not getting your money anyways.

Originally posted by @Nathan G. :

Two toilets = $400

Two vanities = $800

Furnace = $2,000

Hot water tank = $1,000

Kitchen cabinets and sink = $3,000

Kitchen appliances = $2,000

You're looking at approximately $9,000 in losses. Why would you willingly eat the cost and let the criminal go free? if that's the way you do business, please hire me as your accountant!

Seriously, you should press charges immediately. You should have all the tenant's information so law enforcement can track them down quickly. Even if you don't recover your stuff, the criminal should be punished and it would save some other Landlord from falling prey.

Law enforcement isn’t gonna do squat. They got more important stuff to do then go around chasing stolen used toilets (or so I would hope).

Nothing to recover monetarily even if found. Send to collections so it shows up on credit report. And then 1099-C em.

@Aaron Hunt I would agree if this were an ordinary theft with an unknown person committing the crime. In this case, he knows exactly who did it and when it happened (approximately). It wouldn't be hard for the police to get a warrant and track the guy down. They may get lucky and find some of the stolen items. If not, at least it's on record which would help him recover the loss.

I also disagree that there's "nothing to recover." Odds are good that everything could be reinstalled, cutting his losses to a minimum AND he could still go after the guy for anything broken plus the cost of reinstalling.

Maybe you guys live in crazy part of town where cops don't care, $10,000 can be written off, and you don't mind letting criminals go free. That ain't my world.

My son had a tenant leave and take the new range with him.  Police said without proof he took the item it's just another burglary by an unknown party.  They agreed the tenant was about 99.9% guilty but still couldn't do anything from a legal perspective.

Originally posted by @Nathan G. :

Two toilets = $400

Two vanities = $800

Furnace = $2,000

Hot water tank = $1,000

Kitchen cabinets and sink = $3,000

Kitchen appliances = $2,000

You're looking at approximately $9,000 in losses. Why would you willingly eat the cost and let the criminal go free? if that's the way you do business, please hire me as your accountant!

Seriously, you should press charges immediately. You should have all the tenant's information so law enforcement can track them down quickly. Even if you don't recover your stuff, the criminal should be punished and it would save some other Landlord from falling prey.

Nathan-

This is a lite version of the cost :) 

On my end having a few hundred single-family doors now, I am always caught at this crossing with what to do, do you take it as a business expense and move-on as this is an outlier. 

Lets be frank, what will the police do? This is not a case they will want to place much attention to, I can file, I can make it super tough on the people, the result will be minimal  - I do not think they will haul them off to jail. Jail will not solve my loss issue. 

Insurance is a maybe still....

Its not about having a ton of capital and having expendable or available resources, its merely a business decision, not an emotional one, it sucks it happened, but its just an issue that needs to be handled, the question is what is the most effective time of handling this issue.

I value my time @ $300/hr. plus an attorney on the low end will be $200/hr. - then a few people on my staff and a ding on my insurance - all I am saying is that I am already halfway to $10k, I can just bite the bullet make a business decision and just handle it.  Maybe you right, maybe at least file the insurance claim. 

When you file a report with the police, this is just the beginning of the process, as you saw I referenced my cost of time above, filing a police complaint will take hours and hours and hours if they do nab him, then more hours and more hours..... I can spend this time thinking about making more investments and figure out how I can recoop the loss as quickly and effectively as possible.

Originally posted by @Aaron Hunt :
Originally posted by @Steven Gesis:
Originally posted by @Tyler Mullen:

If it were me I would file a police report and then file an insurance claim.  That's what insurance is for, let your insurance company go after them.  Meanwhile you'll end up with a nice newly updated property, you can raise the rent.

If you let them take you for a free ride it also just encourages them to abuse the next landlord.

It is something I am weighing, I am just thinking about the ramifications, having a sizeable portfolio does it make sense recording the claim, paying the $1500 deductible - claim as theft ?  Have had what I thought experienced everything you can possibly encounter, this is something new. 

F all the noise.

File 1099-C as “forgiven debt” for all they took  + all the unpaid rent + eviction fees.

Let the IRS throw em in jail for tax evasion. You’re not getting your money anyways.

 Aaron, intriguing....

Originally posted by @Aaron Hunt :
Originally posted by @Nathan G.:

Two toilets = $400

Two vanities = $800

Furnace = $2,000

Hot water tank = $1,000

Kitchen cabinets and sink = $3,000

Kitchen appliances = $2,000

You're looking at approximately $9,000 in losses. Why would you willingly eat the cost and let the criminal go free? if that's the way you do business, please hire me as your accountant!

Seriously, you should press charges immediately. You should have all the tenant's information so law enforcement can track them down quickly. Even if you don't recover your stuff, the criminal should be punished and it would save some other Landlord from falling prey.

Law enforcement isn’t gonna do squat. They got more important stuff to do then go around chasing stolen used toilets (or so I would hope).

Nothing to recover monetarily even if found. Send to collections so it shows up on credit report. And then 1099-C em.

 Amen, I agree that the police will likely not do to much to resolve this issue

Originally posted by @Hank Sacco :

My son had a tenant leave and take the new range with him.  Police said without proof he took the item it's just another burglary by an unknown party.  They agreed the tenant was about 99.9% guilty but still couldn't do anything from a legal perspective.

 Interesting, I have had odd things happen before, as I stated in another forum I have hundreds of homes at this time, the few incidents that were smaller than this one, the police had little they could do, besides just take my report. 

I remember an incident where the tenants took the appliances, advised the neighbor who then told me that they placed them in a storage unit down the street, went to police station filed the report they said I do not have proof they cannot open the suspects storage unit even though the appliances may be in the unit. 

Do you want a reputation as a landlord who doesn't go after people who take from them? 

I understand not wanting to waste too much time on filing the report especially since it will produce nothing but it doesn't take long.  I had brand new appliances stolen from a reno I was doing.  The officer came took the info and 5 minutes later it was "Have a nice day".  It's like peeing yourself wearing black pants.  You'll feel warm all over but nobody else will notice.

Just because it's likely nothing will get done, i.e. the police hunting down the criminals, doesn't mean the report shouldn't be filed anyway. Guarantee if they've done it to you they'll do it to the next guy. People who can't be bothered reporting crimes just exacerbate the issue. Yes, you may not get back your stuff but at least you've documented these people are thieves. 

The forgiven debt strategy is intriguing. I don't think it can be used in that way, but I'm not a tax accountant. @Natalie Kolodij , any thoughts?

The police won't do much but in either case it seems like a couple hours of your time at 300 / hr should net you up to 12, 15, 20k from insurance (which you pay to cover things like this.)  With hundreds of units also seems like much of this could be handled by staff rather than you personally.  Once the claim is filed you can go about fixing the unit without waiting on insurance checks.  Something similar happened to me this spring and it took a couple hours at most.  I didn't need an attorney.

First, WTF.

Second, I like @Aaron Hunt ' s idea of sending a 1099

Third, I would involve the police.   I had my car broken into forever ago, they took my radar detector and some  crap but they threw a lit cigarette on my seat and burned the fabric on my brand new car.  The guy I thought did it was a person the police was watching.... anyway, 6 years later they called me and got a DNA match on the cigarette butt and wanted to know if I wanted to press charges.  I never knew they did a DNA test and can't believe they actually caught the guy so many years later 

Insurance claim is your business decision, but you definately should go to the police.

File a police report and have your tennat charged with theft. The sooner you do the more likely they will find your tennat still in possession of the property.

If the police can not help I would hunt them down myself.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here