Mobile Home Tenant Damages

One of the top questions I receive about mobile home investing is what if your tenants or payment buyers stop paying you, trash your property, then leave. This article is to help alleviate these preventable worries.

Every time I hear this question, it comes from someone who is role-playing in their mind the worst case scenario of what a tenant would do: Something like, “Your tenant comes home after losing their job. They pick up their crack pipe, get high, and invite their biker buddies over as they all destroy the place while cursing your name!” Something to that effect…

While this drastic scenario is a distant possibility (if you attract buyers or renters of such low caliber) it is much better idea to think LOGICALLY about who you will allow in your mobile home for rent or owner finance. The majority of the human race consists of respectable, honest, hardworking, fair, and upbeat people; likewise the majority of renters and tenant/buyers will have the same traits. If you have followed the rules I discussed in my previous post, How to Screen a Mobile Home Tenant, then you should already have the home filled with a ‘good’ qualified tenant/buyer.

This article is for anyone that has asked the question above or is on the fence about becoming a landlord but fears the violence of others towards their properties. The list below contains questions that must be addressed before you can be able to see what really goes on in each of your renters’ or tenant/buyers’ heads concerning damaging your ‘Goods’.

Do your tenants have a history of violence? I use the word ‘good’ to describe a tenant with a clean background history; free from evictions. I use the word ‘bad’ to describe a tenant that has a history of evictions and reported landlord judgments for damages to properties. In most cases bad tenants are repeat offenders that prey from newbie landlord to newbie landlord; in many cases eventually having to leave a small town because no one will rent to them.

On the opposite side of the coin, good tenants will try their damnedest to keep their credit, background, and reputations clean. It has been said many times before, “90% of your rental or tenant problems can be avoided with the proper screening criteria.”

Do they give you any warning that they cannot pay? If you have filled your mobile home with quality renters or tenant/buyers, they most likely have hit a financial rough patch (I.e. lost their job, got sick, can’t work). Most sellers that know they must leave or will be late will give you a 14-60 day notice before paying late or wanting to vacate. If a tenant begins to have trouble making their monthly payments this can be a sign they are struggling to make your monthly rent payments.

The point is that bad things happen to good people. Good tenants that cannot pay will let it be known they are leaving or eagerly wish to work some repayment plan out with you. Bad tenants typically give less of a time notice when they will be late or must move out.

Do you and your tenant have beef? Is the tenant personally angry with you for any reason? In most cases the answer will be “No”. If so you should not expect the tenants to damage the home out of spite towards you. However if the answer is “Yes,” then you have a tenant that feels they have been wronged and are living in something you own. This is a bad recipe. Whether you over promised your tenants and under-delivered or they are mad at you for some other reason it would be wise to correct this disagreement as soon as possible.

If a tenant likes you and has a good image of you in their minds, the thought of damaging your property would not even enter their minds. “You don’t break friends’ toys.” (kindergarten 101)

What’s their incentive to NOT damage your place? If you have rented to ‘bad’ tenants there is still an almost surefire way to prevent damage to your home; even get the home back in better condition than it was rented. Offer your tenants a cash bribe to leave the home in tip-top move out condition.

I offer all my tenants the incentive to make some extra ‘moving money’ after they leave. Between $300-$700 is the typical reward I pay a tenant for finding a new renter to take over their lease, and half that amount for simply leaving the home in a clean ‘move-in’ condition. Only good tenants can make money for recruiting new tenants or tenant/buyers. Bad tenants only find bad prospects.

Do they wish to continue business in the future? Many times I have sold and resold mobile homes to the same tenants or buyers. I love re-renting to ‘good’ renters/buyers because they know that if they follow the rules and need to leave unexpectedly they will be able to rent or buy from us again in the future with ease. Good tenants hate burning bridges; bad tenants tend not to care about their future rental or home owning needs.

In the end it doesn’t matter why your tenants cannot pay you; it only matters that they have decided to cease making your payments. Tenants are not some elusive monster, they are average people (good and bad) that most of the time leave your homes in good condition when they move on. Once in a while a bad nut slips through your filters and you need to give them the right incentive to like you, help you, and help themselves.

– John Fedro

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.