Burglary at tenant turnover

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Burglary at tenant turnover

Douglas Brown
Member since 2020 · 7 posts · 0 votes

I'm a relative newcomer to RE investment (2 years, 2 properties in Indianapolis) and this was my first tenant turnover.  When the contractor went to make his final inspection of the turnover repairs (nothing major ~$200) he found the property had been broken into and the furnace, A/C, water heater and kitchen range stolen: about $6.5 K loss.  Discussion with my PM and insurance broker revealed that they are both aware of other instances similar to this one.  This has gotten me to wonder: How common is this type of event? 

It seems to me that, given the timing just as the repairs were finished and the level of expertise required to carry out the removal of this equipment, this must be a fairly well organized operation.  This was no smash and grab.  The property must have been under some kind of surveillance.  I have been assured that the contractor had not posted any external advertising signs and the house was in no way derelict.  The suggestion has been made that there might be some involvement by the contractors employees, but there is no evidence to support this possibility.

My insurance broker informs me that there is no coverage available for theft from a vacant property, only for the vandalism (broken windows, messed up carpets, etc).  Is this true?  Does anybody have any thoughts on how this risk might be mitigated?


Anyway, this event has completely wiped out my ROI for the entire year on this property and I would just like some feedback that will help me judge the risk going forward.

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Adam Sankowski
Investor · Somerville, MA · Member since 2017 · 191 posts · 204 votes
6y

@Douglas Brown are you a part of the Indy out of state group on FB?  This has been a major conversation over there.  I would join it asap.  One of the members even came up with a form for people to enter break in info into it so that the locations can be tracked and reported to the police and so that they can see if there are patterns to it all. I think David Blackman on there made the form. 

I know that some insurance companies have vacant property insurance I can't see how theft couldn't be a part of that.  Have you checked out National Real Estate Insurance Group? 

I would recommend getting (in the future, sorry) a Simpli Safe in there as soon as its vacant.  There does seem to be a huge increase in this all and Covid can't be helping things.  Personally I have one coming up and I'm going to pay my agent to drive by occasionally on top of putting a Simpli Safe in there. 

Also following this thread for other's ideas.  Def. get over there and look up that FB group, I think you just apply to join it and its pretty easy.  

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  • Shawn York
    Rental Property Investor · Johnstown, CO · Member since 2015 · 119 posts · 78 votes
    6y

    Wow! Sorry to hear that happened. I've been lucky and not had an issue, but I definitely have heard of this happening. I'm surprised your insurance wouldn't cover that. It's not like the property was vacant for any kind of extended period of time - turnovers from one tenant to tenant are common so I would think a landlord policy would have covered that. I'd push back as much as I could on that.
    Again, sorry to hear and good luck.

    0Reply
  • Adam Sankowski
    Investor · Somerville, MA · Member since 2017 · 191 posts · 204 votes
    6y

    @Douglas Brown are you a part of the Indy out of state group on FB?  This has been a major conversation over there.  I would join it asap.  One of the members even came up with a form for people to enter break in info into it so that the locations can be tracked and reported to the police and so that they can see if there are patterns to it all. I think David Blackman on there made the form. 

    I know that some insurance companies have vacant property insurance I can't see how theft couldn't be a part of that.  Have you checked out National Real Estate Insurance Group? 

    I would recommend getting (in the future, sorry) a Simpli Safe in there as soon as its vacant.  There does seem to be a huge increase in this all and Covid can't be helping things.  Personally I have one coming up and I'm going to pay my agent to drive by occasionally on top of putting a Simpli Safe in there. 

    Also following this thread for other's ideas.  Def. get over there and look up that FB group, I think you just apply to join it and its pretty easy.  

    2Reply
  • Adam Sankowski
    Investor · Somerville, MA · Member since 2017 · 191 posts · 204 votes
    6y

    ps. would you be willing to share the area code or general location of the property on here for reference? 

    1Reply
  • Ryan B.
    Investor · Indianapolis, IN · Member since 2015 · 126 posts · 141 votes
    6y

    What zip code?  It seems this is a common story in 46222 and 46208.

    0Reply
  • Douglas Brown
    OP
    Member since 2020 · 7 posts · 0 votes
    6y
    zip code is 46218
      0Reply
    • Adam Sankowski
      Investor · Somerville, MA · Member since 2017 · 191 posts · 204 votes
      6y

      Oh that's the notorious "do not invest zone" - sorry this happened to you! I'd def. get a security system in there

      0Reply
    • Mike D'ArrigoPro Member
      Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
      6y

      @Douglas Brown this is not real common but it's not unheard of at all. Vacant houses invite theft. Sometimes it is an inside job or someone knew that these things were being installed. It was obviously planned. We generally don't install furnaces and AC's until right before the tenant moves in. Always make sure that your AC is enclosed in a security cage. It might not stop them but it will slow them down.

      0Reply
    • Kerry Noble JrPro Member
      Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
      6y

      someone in a fb group had this happen in 46218 too within the last couple weeks.....its a common thing in 46218 but dont let that discourage you....

      i may have some atlernatives for you to help you....inbox me 

      0Reply
    • Luis Vaca
      Specialist · Oxnard, CA · Member since 2018 · 92 posts · 32 votes
      6y

      This happened to me last year as well, although my property is in Kansas city. My guess is the culprits drive around and target properties with FOR SALE/FOR RENT signs on the outside. 

      I decided to put a cage around the new one, i think it was about 500$ extra. 

      1Reply
    • Allison WinstonPro Member
      Indianapolis, IN · Member since 2020 · 26 posts · 11 votes
      6y

      We just closed on investment property in the 46208. I also lived in that area years ago  and yes you should get security cameras. 

      0Reply
    • Alex Olson
      Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes
      6y

      @Allison Winston I do not use signs outaide.of the house anymore for this reason. I use Zillow network, zumper, Craigslist, and realtor.com. use good locks and LIGHTS. Hope that helps.

      1Reply
    • Ric Ernst
      Los Angeles, CA · Member since 2019 · 148 posts · 127 votes
      6y

      @Douglas Brown sorry you went through this! Curious if you notified your insurance company that your property was vacant. Typically there is a distinction between vacant property than a tenant occupied property as far as insurance goes...the vacant property premium is higher although, if you are doing a turn-over, that shouldn't prorate out to much over the course of a couple weeks or however long you are vacant. That should have given you the coverage you needed. AC units do tend to walk away from vacant C class houses in Indy which is why all of mine are installed on a concrete pad and chained down. Most yards are unfenced and easy to walk in and out of.

      0Reply
    • Josh C.Pro Member
      Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
      6y

      Unfortunately it happens, not common, but certainly happens. And it’s the construction activity in my mind that causes it. A vacant house with good cooper in it will be left alone for years and then about a week into us working on it and there is a break in. Someone stole granite counters one time. Also toilets and vanity mirrors. Who does that? Once had a break in and like an idiot left all the siding and windows in the house and 6k of custom sizes windows and siding walked off. Took 5 weeks to reorder windows. Just a shame.

      Part of the problem is police sadly. They do not care at all or too busy to care. I have people on video stealing with the license plate very visible and they won’t investigate. Or brand new furnace ductwork with very clear finger prints they wouldn’t investigate. Sucks sometimes but part of it. We rehab at least 100 homes a year so I have lots of experience in theft, but in terms of percentage of homes being victims it’s still very low. Lights and alarm systems help, but nothing is 100% and if they want it they are getting in. Also, cage or chain your AC

      There is vacant policies that cover theft and I strongly recommend them. Foremost is one that works here in Indianapolis. I can refer if you need an agent.

      Sorry that happened and good luck.

      1Reply
    • Nick GiulioniPro Member
      Rental Property Investor · Carmel, IN · Member since 2016 · 1k+ posts · 615 votes
      6y

      You need to get a security system for sure. 

      0Reply
    • James Wise
      Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
      6y
      Originally posted by @Douglas Brown:

      I'm a relative newcomer to RE investment (2 years, 2 properties in Indianapolis) and this was my first tenant turnover.  When the contractor went to make his final inspection of the turnover repairs (nothing major ~$200) he found the property had been broken into and the furnace, A/C, water heater and kitchen range stolen: about $6.5 K loss.  Discussion with my PM and insurance broker revealed that they are both aware of other instances similar to this one.  This has gotten me to wonder: How common is this type of event? 

      It seems to me that, given the timing just as the repairs were finished and the level of expertise required to carry out the removal of this equipment, this must be a fairly well organized operation.  This was no smash and grab.  The property must have been under some kind of surveillance.  I have been assured that the contractor had not posted any external advertising signs and the house was in no way derelict.  The suggestion has been made that there might be some involvement by the contractors employees, but there is no evidence to support this possibility.

      My insurance broker informs me that there is no coverage available for theft from a vacant property, only for the vandalism (broken windows, messed up carpets, etc).  Is this true?  Does anybody have any thoughts on how this risk might be mitigated?


      Anyway, this event has completely wiped out my ROI for the entire year on this property and I would just like some feedback that will help me judge the risk going forward.

       This happens all over the USA. Higher risk the neighborhood is the more frequently it's going to happen. Have seen it happen 100's of times.

      0Reply
    • Douglas Brown
      OP
      Member since 2020 · 7 posts · 0 votes
      6y

      WOW! I'm overwhelmed by the information and suggestions that this post has generated.  It will take some time for me to get my head around it all and figure out where to go from here.  Thank you all for the feedback.

      Probably most important, though, is that your interest  has helped revive my spirits, which had sunk to a fairly low point.  I needed some outside input to get things into proper perspective.  I got into RE investment as a (hopefully profitable) hobby mainly to occupy myself in my retirement here in Mexico.  In that I have truly succeeded.  I have learned much about a world I never suspected existed and clearly have much more to learn. I've also made the acquaintance of quite a few interesting people.

      Fortunately, while this incident has been a significant setback, it nowhere approaches the catastrophe with which many of our fellows are faced because of the wide spread consequences of the pandemic.  As I said above: Proper Perspective.

      Once again, thank you very much, and I anticipate with pleasure interacting with many of you as I move forward with this project.

      0Reply
    • Harvey LevinPro Member
      Property Manager · Indianapolis, IN · Member since 2012 · 208 posts · 160 votes
      6y

      @Douglas Brown  Lots of great info mentioned above. I am not sure but I didn't see anything about Builders Risk policy. I do the following:

      1. Use Foremost as Insurance on a vacant house at purchase needing repairs.  Switching at occupancy to a standard policy 

      2. When occupied have my agents quote occupied policies as well as a quote from Foremost making sure when a vacancy occurs coverage is available.

      3. If it is a higher-priced property that is vacant and needs some repairs or a major rehab on a lower-priced property  I will purchase a Builders Risk which also covers uninstalled materials and products on site.

      We went for 4 years with zero problems in 46201, 46205, 46208, and  46218 averaging 80 to 100 vacant units per year but at the end of 2019 and 2020, we have had to take more precautions. Boarding up units including all windows until occupancy, Simpli Safe Alarms, holding off install of new HVAC  and appliances until the day before move-ins seems to work very well.

      Good luck  

      0Reply
    • George H.
      Rental Property Investor · Cleveland, OH · Member since 2017 · 53 posts · 14 votes
      6y

      It happened to me last year. The PM went there less than a week before tenants were due to move in to check condition after some cleaning and minor repairs and found all appliances in the lower unit of my duplex were stolen. The carpets in 3 of the 4 bedrooms were cut out and taken, with the 4th still in the BR rolled up, ready to remove. My apartment on the 3rd floor was also broken into with small things missing. I had only bought the property a few months prior and there was little furniture. But the thieves did take a TV, coffee and end tables and 2 suitcases with my clothes. I had yet to buy a dresser. I work for the military and was away at the time. They even stole cheap silverware that I noticed missing after cooking a ramen when I returned to assist with getting it rent ready prior to tenant move in. Clearly they stayed a bit and planned to probably return.

      My insurance did cover losses minus my $1,500 deductible. Clearly this was not a quick in and out job. And I feel the lock box advertised the place as empty. Fortunatley there was no vandalism. There are now Ring Cams all over the place, and Wyze cams in my apartment.

      0Reply
    • John Mocker
      Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
      6y
      Douglas, It sounds like, at the time of loss, this property was vacant. Your policy was issued based on an occupied house. I probably has some language reducing the coverage if the property is Vacant or Unoccupied for ___ days. That number is normally 30 or 60 days. You need to check you policy to find out which number of days applies. Then look at the # of days from when the property was last occupied to when the loss occurred. If the tenant moved out 4/1/2020 and the loss happened 4/20/200 the house was vacant for 20 days. In that case, although it was vacant at the time of loss, it was not vacant long enough to trigger the clause reducing coverage.
      0Reply
    • Douglas Brown
      OP
      Member since 2020 · 7 posts · 0 votes
      6y
      @John Mocker 
      Thanks for the encouraging information.  I'm afraid that the information in my original post was misleading.  I was led to believe by my  insurance broker that I was not covered when I first contacted him.  To be fair, he did say that he had nothing to do with claims.  
      In fact,  I have since made a claim with my insurance company, and at this point have only received notification that they have initiated the claims process, but nothing about its resolution.  I apologize for propagating FUD (fear, uncertainty and doubt).  In future, I will try to keep my emotions under control (Good luck with that!), and only post verifiable fact.
      0Reply
    • John Mocker
      Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
      6y
      Douglas, Glad to hear that they are looking into it. I would still recommend looking at the actual policy so you have a better idea of what should be covered. Because of the 30 or 60 day vacancy clauses, the actual date of loss may be an issue. If your PM discovered the theft on day 40 and there is a 30 day clause the actual loss date could be an issue. I would try to find out from the police if anyone said they saw someone there earlier or witnessed anything that might indicate that the robbery happened on that date. Other things you might try if the date is important is checking the utilities (Gas, Water, Electric) for changes that would indicate the theft.
      0Reply
    • Douglas Brown
      OP
      Member since 2020 · 7 posts · 0 votes
      6y

      A number of participants in the discussion have recommended installing a security system.  Is there anywhere where there is discussion of options for security systems; advantages/disadvantages, cost/benefit?

      0Reply
    • Douglas Brown
      OP
      Member since 2020 · 7 posts · 0 votes
      6y

      @Adam Sankowski You refer to the notorious "do not invest zone" which indicates to me that there exists some sort of community/neighborhood rating scheme. Is that true? If so, is it publicly available? If the answers to both previous questions are yes, could you instruct me on how to access this information?

      0Reply
    • Adam Sankowski
      Investor · Somerville, MA · Member since 2017 · 191 posts · 204 votes
      6y

      Hey @Douglas Brown sorry so apparently BP won’t let you post YouTube links. There is a great video on YouTube to watch. Search “mainstay property group, do not invest” should be like the 3rd video down?

      Also both my PM and agent immediately told me to avoid that area when I was first looking. They said 99% of their issues come from that zip code so they won’t invest there anymore. With that said Harvey on this thread is a section 8 wizard and I think he’s had success there... but if you want to have a greater chance of avoiding these issues In the future maybe stay away.

      also no offense to Your agent or PM but if they were excited about this area and didn’t warn you about it maybe time to find some new people? Jump on that Indy OOS investor Facebook group, easy to find great people to work with on there!


      0Reply
    • Adam Sankowski
      Investor · Somerville, MA · Member since 2017 · 191 posts · 204 votes
      6y

      The video is called “top 4 no zones in Indianapolis, mainstay basics”

      0Reply
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