Landlord Avoiding Expense, But Increasing Vacancy
Yesterday a new rental property owner was assigned, and we often get owners that come to us in distress. The problem we're having is that the property has been vacant for a little while and it needs an extensive clean up. It's to the point where it probably is going to cost the owner around $600 - $700 to clean this property to make it tenant ready for another tenant.
Now, the issue is, she apparently never collected a security deposit from the tenant. She appears to maybe knows the tenants. I don't think she knows them well, but she knew them well enough and got excited to run it out quickly. Did so kind of recklessly, didn't collect the security deposit. The tents moved out and now there's a clear charge of probably around $600, $700 with all the stuff that need to be taken to the dump, along the deep cleaning that has to be done to the unit.
The owner's been dragging her feet getting the unit cleaned as she feels it's not her responsibility to have to get the property cleaned. She sees it as the tenant's responsibility, (which it is) to get it cleaned. But the problem is, she's basically not getting it cleaned. I estimate this property's rent estimated around $3,337. Now, if we start looking at vacancy, and I keep saying there as a vacancy fee that you pay as a landlord for not being able to find a tenant quickly enough; if you were to divide that 3,337, by 30 days, that gets you around $112 or close.
If every day she is paying $112 vacancy fee for not having a tenant, and we can't put a tenant in there because the place is in a deplorable state, however, property owner need the realized that the second you own a rental property, you become an investor. What's right and what's wrong doesn't really come into it. What's right and what's wrong comes into your actions and what fits with your morals and what fits with your ethics, but it has nothing to do with any other factor.
What we're talking about here is numbers. This woman needs to get this property cleaned immediately. She needs to pay the money, and she needs to get this property cleaned so we can get a tenant in there because it is costing her $112 a day until she does that.
Now, it's going cost probably around $700 to get this property cleaned. There are significant items that have to be taken to a dump and the housekeeper has to pay for that, so it's going to cost a lot of money to get it done. If the calculation are done right, in a few days she would actually cover the cost for restoration of the property.
I'm not saying she shouldn't go after the tenant, not am I saying it's not the tenant's expense, but it was very foolish of her to rent the unit without a security deposit. I understand not everybody has experience and I understand people always expect the best, but that doesn't always happen. And even though she didn't collect the security deposit, this is a tenant expense.
I'm not obligated to do so operate on her behalf with regards to that tenant, but I am going to go and contact the tenant and see what I can do to get them to pay. But regardless of whether they pay or not, this is an investment. Investment Wisdom advise to pay $700 to get it cleaned so you can get a tenant in there sooner than later that will pay you $3,337 in rent because vacancy kills. Happy investing!!!
