Real Estate Agent · Dallas, TX · Member since 2017 · 136 posts · 141 votes
Anybody here have any success stories retrieving money owed from previous tenants? 
One of my ex tenants left the house a mess, owes me a couple months of rent and a fee for breaking the lease early. We set up a repayment plan, but as of last week he begun ghosting me. I get sent straight to voicemail.
I’m leaning towards using a commission based collection agency. That or a straight gangsta..
Sorry. You're in Texas. No wage garnishment here. Collections are near impossible, especially when tenants are broke (which is the most likely scenario with your tenant). You can waste time and energy pursuing in court but chances are not good of collecting. Just take the lesson learned and move on.
Anybody here have any success stories retrieving money owed from previous tenants? 
One of my ex tenants left the house a mess, owes me a couple months of rent and a fee for breaking the lease early. We set up a repayment plan, but as of last week he begun ghosting me. I get sent straight to voicemail.
I’m leaning towards using a commission based collection agency. That or a straight gangsta..
Any tips? A guideline to follow perhaps?
Move on. You'll be chasing a five with a twenty. Best case your fees will equal what you obtain from the deadbeat....and may take years to get. Last I knew, a lawyer buddy specifically in the business of collections of deadbeat renters said that they have about a 21% close ratio. So a 2 in 10 probability that you get some money. Go to a casino. You rented to a professional tenant. You don't explain your vetting process, but if you have one, he snuck through.
@Ivan Loza You could always try a service like Rent Recovery Service or AOA Debt Reporting Service. They'll attempt to collect the debt, but the best part is (in my opinion) they'll report the debt to all three credit bureaus. So even if they don't collect anything, you'll get the debt on the ex-tenant's credit report (which they may want to remove some day and decide to pay you off), and be doing a service to other landlords by warning them about this deadbeat tenant (at least the ones who bother to run a credit check). Plus, you don't even need a court order to use these services. So really it wouldn't hurt to try.
You wont see a dime of the $$...
So you have to ask yourself if the time, effort and some extra $$ are worth trying to make this issue possibly haunt this tenant in the future....show up when he tries to rent again, buy a house or a car etc.....
For some the answer is YES.....I know the $$ is gone but I want to inflict some shred of accountability......if no one EVER does it, these clowns will keep doing it over and over.....someone has to at least try....
For others, the answer is NO....its not worth my time and $$, let it go and move on....
I understand the economics of the situation....but I hate to let people get away with ZERO accountability....that just contributes to many of the issues in our society
@Ivan Loza surprisingly last year I did get paid in full by former tenants who bailed early on their lease agreement as I was about to evict them. They left the unit in very bad shape (holes in walls, cigarette smoke smell, soiling and damage from unauthorized pets, graffiti and intentional damage, unflushed turd and vomit in the toilet, drug paraphernalia and liquor bottles, disgusting furniture and trash left behind, fridge, dishwasher and oven looked like crime scenes, cockroaches in the cabinets, grease down the drain, literally the works). We sent them a large bill for the damages (through my PM) with before and after photos and unsurprisingly we heard nothing. Then we sent a final notice that we would be filing a claim in small claims court, attempting to garnish their wages, hiring a collection agency and doing everything we legally could to recover the money to pay for the damages, and they actually promptly paid the entire bill! Probably not a typical result but it was well worth the effort of sending the two letters. Worth a try if you can find their new address or through text if you can’t, but if that goes nowhere you’re best bet is probably just to move on, take it as a lesson learned and improve your best practices when it comes to screening tenants, performing before and after walk-throughs, setting expectations/training tenants, inspecting the property more often, etc. Good luck!
@Ivan Loza You could always try a service like Rent Recovery Service or AOA Debt Reporting Service. They'll attempt to collect the debt, but the best part is (in my opinion) they'll report the debt to all three credit bureaus. So even if they don't collect anything, you'll get the debt on the ex-tenant's credit report (which they may want to remove some day and decide to pay you off), and be doing a service to other landlords by warning them about this deadbeat tenant (at least the ones who bother to run a credit check). Plus, you don't even need a court order to use these services. So really it wouldn't hurt to try.
This was going to be my suggestion precisely but I will add a couple items. 1) As others have stated the chance of getting any of the money owed is low 2). Especially true of Rent Recovery Service, the service is cheap. Last I looked for Rent Recovery Service 3 letters and a report to credit bureau cost $30 (this was probably just over a year ago so should not be too much high now). This makes the price so low that it is just easier, after a handful of attempts to collect, to just use the service realizing that mostly what you are likely getting is that they will report it to the credit bureaus (plus 3 letters); the odds of any collection is low but it will not continue to consume your time.
I have no direct interest in either of the two suggested recovery services.
Wage garnishments usually require a judgment against the debtor first. Depending on whether your repayment plan includes an acknowledgement that he owes you $X, you may have to start all over again in court. If he acknowledges the amount of the debt in the plan, then your court case is much simpler.
That said, is the debt owed to you personally, or to a company you own? In some states, companies always need lawyers in court. Dunno about Texas. If the debt is owed to you personally, you can always represent yourself (you may have a fool for a client, but that's a different issue) and your court case could be cheaper.
Once you get the judgment, you can do a citation to discover assets to his bank, a wage garnishment to his employer, or whatever else Texas law allows.
Collections is not a bad idea. I'm an attorney who deals with consumer issues, and a collection appears on their credit reports, and can screw them over with future rentals. It will say "apartment" or housing" which is a red flag to other landlords. Also, if they apply for a new job, they could be asked to resolve this, as employers care more and more about credit. I would say 9 times out of 10 you won't get anything, but if you have tenants here and there with these issues, no reason not to do collections.
I'm going to have to agree with the majority here-- it's the cost of doing business. You aren't going to water out of a dry well, so just move on, be happy it's not more damaged.
You can try pursuing a judgement, but in all reality, you should have had a security deposit, so it's really just 1 month's rent loss. Focus hard on getting it rented ASAP, do a move in special, so whatever it takes to cut your losses and focus on getting a new tenant.
@Kyle J. Thanks Kyle, I ended up reaching out to debt collection agency that reports to the credit bureaus. I know he wanted to buy a vehicle soon, so hopefully I’ll hear from him once he realizes his debt isn’t just going to disappear
@Ned J. Same, I can get over the money (though I would love to have it) but I can’t get over the idea of him thinking this is something he can just routinely do to landlords
@Linda S. I ended up just contacting a contingency based debt collection agency and hoping for the best. Luckily I was able to get the house fixed and rented within 10 days!
Hopefully the debt collection agency can do something, but I wouldn't suggest paying them anything as if the tenant is moving around, it will be very challenging and expensive to track them down.
One thing you gotta remember, you aren't the moral police, people (especially if you're doing C/D low income) will burn you, many times over.. roll with it and move forward.
@Linda S. Ha thanks! And I made sure to select one that charges only AFTER they have collected. The house rents for 1350 I thought that would bring in decent tenants in Dallas 🤷♂️. But as I told my client today, I’m sticking to houses that rent for 1500+ from now on! Plus screening more meticulously of course
@John Chapman what’s the lesson learned? Charge higher deposits? Don’t rent in the area? Settle with people at a cheaper rate than what they owe? Or go gangsta?
@John Clark I own the house under my name. And I think most forms of garnishments are prohibited in Texas. Not cool. My best bet now is hoping that one day he aims to better his credit and paying me off becomes part of his plan
@Ivan Loza thanks for the feed back. I’m looking at lower income areas at the moment since I’m starting out . So I would charge higher deposit and evict much sooner. Has direct draft ever been done before for rent? And do you use a property manager? If not, why?
Our attorney uses a collections agency that keeps a % (i think about 30%) of anything they can collect. It costs us $0. It ends up on their credit. If we get a check in the mail it's a surprise. Not something we are expecting. :)