Tenants Not Screened Properly
The home on Bryce Dr is our latest project and is owned by a couple who have self managed 4 properties for years, and have been relatively lucky. They have done everything themselves and have done a great job but never had to encounter a tenant like the one they placed in Bryce Dr. They had no experience with what was about to unfold before them in their rental property.
The tenant couple who moved into Bryce Dr last year changed their streak of good luck. The couple arrived to do a walk thru and immediately looked like a great fit. They were nice and polite and even brought their grandmother with them who supposedly lived down the street. They passed all of the owners eye tests and it was left at that. No true due diligence was done on the couple to uncover their past rental history. It wasn't until after the new tenant couple moved into the rental property that problems started to arise. Several months after they got comfortable is when they took the house "hostage".
Red Flags Started To Appear
The first thing our clients noticed was the yard going downhill. The grass turned brown and was not taken care of properly. After that rent started to become infrequent and was often late and eventually not paid. Repeated attempts were made to collect rent and late fees but were made in vain.
After attempts from the owners to do inspections on the property they were refused even with proper notice. Tenants began to request maintenance. Scheduled repairs were made and the tenants once again would not let the owners into the property. Things began to become heated between the owners and tenant once requests were not being met. Soon we discovered there were as many as 10 people all of whom were not on the lease agreement living on the premises. Requests were made for those living there illegally to leave and they were refused once again. When the situation became clear the tenants were not going to work with the owners they contacted us for assistance in getting this issue resolved the legal route.
We Took Over Management
We took management of the home and immediately started an eviction. The eviction process is never a route anyone wants to go down but the only legal option we have to properly remove someone from a rental property. The state of Utah has several policies that must be met and a very clear and definitive guideline that must be followed in order to legally evict a tenant. This typically means a great expense not only for the eviction fees to attorneys and the courts but lost rents collected on the property every month that it sits vacant as the process is followed.
We were able to successfully get through the entire eviction process without much headache or heartache. Once we stepped in we were able to collect money from the tenants to pay these fees. The result is that our clients are out the costs of repairs to the home and were able to collect lost rent and eviction fees. In our research in preparation for the legal process we discovered that the tenants had a 2 previous evictions, 1 bankruptcy, 1 foreclosure all within the last 10 years - and who knows the details of the other 10 people they had been living there.
The home was in decent shape before the last tenants moved in but was on the edge of needing several updates. After everything was done and said it was time to focus on efforts to clean the house up and make some improvements and repairs damages.
The renovation project was started in October and now nearing completion this month right before Christmas. Details for updates needed are below.
Estimated Updates Needed:
- New Carpet throughout
- Paint Interior and Cabinets
- Replace Door Downstairs in Bedroom, Bathroom and Furnace Room
- Replace missing lights and outlets
- Fix Kitchen subfloor and install LVP
- Plumbing under kitchen sink
- Replace blinds in living room and bedroom
- Replace ceiling fan with dome light
- NEW roof, swamp cooler and satellite dish
- Paint facia and peeling paint exterior
- Fix storm door and frame on front and back entrance doors
Renovation Costs & ROI:
Total Renovation Cost: $36,000
Judgement Against Tenant: $16,072
Previous Rent: $1500/mo New Rent: $1850/mo
Estimated ROI is 12% with little to no maintenance for years to come.