What Happens When A Tenant Damages My Mobile Home?

At least once every two weeks I get an email that asks me, “What happens if my tenant or tenant-buyer stops paying,  damages my home, and leaves without notice?” While this question is very valid, the real question is “How do I prevent a tenant or Tenant-buyer from leaving my investment home damaged and/or without paying every month?”

The answer is to start preventing these possible problems before they ever begin, start by pre-screening, pre-screening, pre-screening your potential tenants, residents and tenant-buyers.

You wouldn't just hand over your car keys to a stranger. So don't hand over your investment mobile home to anyone that you haven't pre-screened and approve. The first step in making sure you mitigate

Keep your eye out for…

• Honesty:  I like to say, “We grade on honesty as well as your history.” An applicant who forgot to tell you any major criminal charge, debt, or issues with credit may not be trustworthy. I want to hear about everything I should see in a background or credit check. I always repeat with, “Is that everything?”
• Credit Score:  +600 is a good start. Most applicants are quick to tell you their story of what happened to them and why their credit is so poor.
• Rental History:  Look for tenants with good rental history. Anyone that has moved more than 2 times in the past five years may not be your best candidate for a long-term buyer.
• Eviction History: I like to see NO evictions within the last 7 years.
• Foreclosures and Bankruptcies: Some people may be coming from a SFR they had owned, but due to hard times had to declare foreclosure or bankruptcy.  Use your best judgment and their past history as your clues. One bankruptcy t is acceptable if all else passes, however  chronic bankruptcies do not make for great buyers.
• Criminal History:  Some criminal history is alright depending on the crime.  No criminal history is ideal.  Misdemeanors are better than felonies.  Be prepared because most applicants will have a story for “why it wasn’t their fault.”  I like to see that there are no recent offensives. Violent crimes and/or child predators are never allowed in my book!
• Job History:  Job history should be steady. At least 1 verifiable job is recommended.
• Personality Types: All approved applicants should sound and look excited to have this opportunity to own.
• Home Life:  You may choose to surprise visit the potential buyer at his or her current home to view how he or she lives. Sloppy or clean? You may have heard this before and it still works. MOST investors/landlords NEVER complete this extra step. These buyers will be treating your home similar to their current home.
• Personal Automobile Condition: Note the type of car the potential buyer is driving. Is the buyer’s car clean inside? How about outside? This may show the buyers cleanliness habits without visiting their home.

Things that should raise red flags:

• They are currently homeless and have nowhere to stay.
• They have no money saved at all.
• You see signs of drug use.
• When you interact with the applicant be aware of how they treat their children. Short tempered, loud, angry, and abusive are all good signs for a bad potential tenant.
• They talk to you about their horrible ex-landlord, and how they trashed the place when they left.  They say, “The awful landlord made us pay rent every single month.” Yes, this actually happens.
• They are in the middle of an eviction or bankruptcy.

TIP:  It is infinitely better to have an empty mobile home than to approve a poor tenant. That sounds like common sense but when a Buyer wants to sign papers with you and has the first payment in hand you may have second thoughts. Be smart and have your wits about you.

Words to the tenants and tenant-buyers reading this: Always make sure that you are happy and more than comfortable with the price, amount to Move-in, and monthly payments for your future home. If you are concerned about repairs always ask to check and verify for yourself prior to buying.

What to do if your tenants, residents, or tenant-buyers stop paying without notice?

Assuming that all the paperwork you use to rent or sell a mobile home allows you to evict the occupants inside, then your worst case scenario most times is only an eviction. This legal process of removing the occupants from the home can cost approximately $200-$600 depending on your state and county.

However, I have never met a person that has wanted an eviction on their record. With kind words, a week or two of time, and perhaps a few hundred dollars, an eviction and any damages can be avoided. Always aim to have the residents leave on their own accord if a repayment plan is not arranged or followed through with. Make repayment-plan payments due weekly, this way if a payment is made it will be noticed in a week and not in 30 days.

TIP: When speaking to tenants that stop paying always use appropriate tone. Do not talk down to anyone. This is no laughing matter, so be serious and speak clearly.

As a rule…

Low Risk: A low-risk tenant or tenant-buyer is someone credit conscious that cares about their credit and their reputation. These folks do what they say they are going to do, or they alert you in advance of their error. Low-risk tenants are easy to manage and follow the rules. If a payment will not be on time they will call you quickly to notify you and figure out a payment arrangement. If they cannot stay current due to finances they will also let you know they are moving out sometime soon.

High Risk: A high-risk tenant or tenant-buyer is someone that is not credit conscious. Many high-risk tenants have a history of moving from one place to another quickly. High-risk folks tend to think only of their situation, lie, dodge phone calls, miss appointments, make excuses, etc. It is easy to be fooled or manipulated by high-risk occupants so follow your gut and the background/credit check you perform.

If a tenant or tenant or tenant-buyer has been on-time with monthly payments for 12 months or more I am easier to give extension to help this tenant get back on their feet, however not before hand.

TIP: A general rule is once an occupant starts slipping with their monthly payments and/or asking for extensions to pay, it is a countdown to when the occupant says they need to leave.

Has this situation just happened to you?

If you have found this page because a tenant or tenant-buyer just left your investment mobile home damaged and without paying, then listen up cause here's what you'll want to do:

1. If the tenants are still in the home try to happily and quickly get them to leave.
2. If there is already severe damage file a police report.
3. Evict the occupants if still in the home if not paying.
4. Take legal action to be compensated for damages.
5. Next, quickly clean and fix the home.
6. Understand why this happened to you and your tenant? Understand how to avoid this situation in the future.
7. Resell or re-rent.

Emotions lead to damages.

If a tenant or tenant-buyer damages your home after or during their leaving process it is important to remember that this person is mad at you and mad at the situation, and they feel wronged. It is our job as investors to be crystal-clear when signing, reading, and negotiating all prices and terms. If a resident feels pleased with you then they will not feel the need to damage your property to get pay back they feel they are owed. Low risk occupants with a clear track-record have a much lower rate of damaging homes compared to high risk residents.

Conclusion: In conclusion everyone ideally starts off a seller/buyer or landlord/tenant relationship with the plan to do just what they say they are going to do. For many reasons a resident may slip behind and be unable to pay. If the resident is a high-quality person they will admit they can't stay as agreed and leave. If the resident is a low-quality person and/or if they feel tricked or cheated then the resident may be unhappy.

Always aim to fill your homes with low-risk buyers or renters with good histories. Do what you say you are going to do as an investor and only sell Win-Win attractively priced mobile homes.

I hope this article makes sense and provides help with this question.

If you've had a similar experience good or bad please comment it below and let us know.