Published date 05.10.2023
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Lumi Kodud has 5 years of rental experience.

Using Rendin, they have saved €42,300 in rent losses.

While the average landlord has one rental apartment, either inherited or retained after buying a new home, one of the biggest landlords in Estonia is Lumi Kodud, with nearly 500 apartments. What has been their experience as a property owner and dealing with problematic tenants?

Lumi Capital, a real estate investment company, has a portfolio of rental properties across the Baltics: three in Tallinn, one in Vilnius, and two in Riga. The first residential rental building was completed in 2019 in the Manufactory Quarter in North Tallinn, laying the foundation for Lumi Kodud.

Reeli Simson, Head of Business at Lumi Capital, explains that Lumi Kodud was created to provide a pleasant living environment to people, including a simple and transparent rental process.

‘The tenants have different profiles. In terms of lifestyle, they are relatively different people, each at a different stage in their lives. They include families and couples as well as single people, locals and foreigners, older and younger generations,’ Simson describes the diversity of tenants.

In the following story, a representative of Lumi Kodud talks about the good decisions that have benefited them as a landlord, shares rental tips stemming from her experience, and discusses tenant-related problems that Rendin has helped solve.

Good rental decisions

‘Our rental apartments are unfurnished and have a neutral interior. They include fixed furniture, such as the kitchen and bathroom, wardrobe solutions, and major appliances,’ says Reeli Simson and adds that it was certainly a wise decision, considering the experience so far. ‘There is less worry and hassle about smaller furniture.’

‘As we offer tenants the possibility of renting an apartment through Rendin without having to pay a security deposit, they can instead buy something they need for their home,’ explains Simson. ‘We certainly see this as an added value.’

The first buildings of Lumi Kodud have now been in use for five years. Simson considers their condition to be very good. ‘After all, there has been quite a turnover of tenants, but even the first signs of natural wear and tear are difficult to notice,’ Simson says. She is convinced that it is the quality of the products and materials that make rental housing solutions durable and long-lasting.

Photo: Lumi Kodud

All property owners have the same problems

When asked about the company’s experience with problematic tenants who do not pay their bills or cause property damage, Reeli Simson responds with a sense of relief: ‘Taking into account the number of rental apartments, we have had only a few really big problems. Smaller things happen all the time and more often.’

‘As a property owner, we have been exposed to everything that others in the same role have experienced or heard about from a friend or acquaintance. Different visions of cleaning up, debts, and property damage,’ she says.

Thorough cleaning up before moving out

To continue the list, Simson gives a common example – a thorough final cleaning just before moving out. ‘We have a contractual agreement with each tenant that before the end of the tenancy, we will inspect the apartment before the final return. If necessary, we will give the tenant further instructions on what else should be done before moving out. This way, we can be sure that both parties are aware of any possible defects and that the apartment is in good condition when handed over. If the tenant wishes, we can also arrange cleaning and repairs,’ he explains.

Some tenants do not understand why cleaning or repairs cost so much. ‘If you do it yourself with your own resources, it almost feels like it is free. In the case of professional cleaning or interior fittings, you pay for the quality of the work and the time and the resources of the employee. This leaves the tenant with more free time, which can be used for arranging the move,’ explains the representative of Lumi Kodud.

Debts of tenants and damage to property

Moving on to more serious issues, Reeli Simson says that there have been cases where people have fallen behind with rent and utility bills. ‘The worst situations are when, in addition to the debt, it turns out that the tenant has also caused property damage when they move out.’

‘Naturally, we take into account the natural wear and tear that comes with living in an apartment over a long period of time, but property damage is clearly something else. This shows that the rental home has not been maintained – material damage has been caused through negligence or malicious intent,’ she adds. ‘If the door has been kicked through with a fist or children have been allowed to draw all over the walls, this cannot be considered normal wear and tear.’

Our experience with debtors is that they tend to get into debt almost immediately anyway. There are few examples of how someone with exemplary payment behaviour can become a debtor. Everyone has their own reasons, but we are still forced to end these agreements as soon as possible.

If a door has been punched through with a fist, this cannot be considered natural wear and tear.’ – Reeli, Lumi Capital

Specific case: over €5,000 in rent losses

The representative of Lumi Kodud talks about a case where a tenant living in one of their rental apartments incurred a debt already in the first months after moving in. The apartment was occupied by a family with several children of kindergarten and primary school age.

The agreement was terminated due to the arrears, after which a new obstacle emerged – the problem of recovering the apartment from the family. ‘The tenant gave a number of reasons why they could not move out. At one point they said they had nowhere to go with their family. Then they told me that they could not find a moving van and so on,’ says Reeli Simson.

The transfer and receipt of the property took several weeks, after which we discovered that the apartment had been left completely uncleaned. Not only that, there were plenty of scribbles and drawings on the walls and the shelves had been taken down from the walls. There was also a hole in a wall. Among other things, the toilet seat had been smashed.

Damages in the rental apartment

‘All in all, we found all sorts of damage, which meant that we had to make repairs later. The apartment was very, very dirty, which required a thorough cleaning. Fortunately, the bathroom was easy to clean thanks to the tiles,’ Simson describes. ‘What was clear was that a good behaviour could have prevented all this. The rental apartment had not been cleaned for a long time and was in a sad state.’

Even though the tenant eventually proved to be cooperative and eventually vacated the rental space, they did not take responsibility for the arrears in rent and utility payments and for the damage to property. When the legal department of Rendin took over the case, the tenant was given an additional deadline to pay compensation for the rent loss, but this was not met with a positive response.

After filing a claim, presenting (and analysing) the evidence and communicating with both parties to the agreement, Rendin compensated Lumi Kodud for more than €5,000 in damages.

The case of Lumi Kodud: Rendin protection vs deposit



Reimbursement of rent and utility arrears



Compensation for property damage



The financial loss of the landlord



What should a property owner do in case of rental problems?

‘Communication is the most important thing when rent problems arise. Whatever has happened, intentionally or unintentionally, it must be talked about. As a property owner, our aim is to find a solution: to get out of the situation with as little damage as possible and to enable the tenant to do the same,’ comments the representative of Lumi Kodud.

She knows that there is certainly no point in holding an insolvent person to an agreement. Once the first warning signs of arrears appear, we should follow the law and take steps to terminate the tenancy agreement. ‘In doing so, the property owner should be very specific and be able to explain on what basis and under what conditions they are terminating the tenancy.’

The first thing is to get the tenant to move out. Otherwise, the debt for rent and ancillary costs will only grow over time, and it will be difficult or alltogether impossible to recover,’ says Simson.

What is the most complex aspect of the problems? ‘It is definitely the communication. Although we always encourage our tenants to contact us with their concerns, sometimes people feel shame and avoid contact,’ says Simson. ‘For example, if they themselves do not see a good solution to the situation or they have nowhere else to go.’

Simson stresses that the rental relationship is a two-way street, with both parties having a role to play. ‘We always assume, in good faith, that people are honest and able to talk about their concerns.’

Photo: Lumi Kodud

Experience with Rendin: simple and smooth

‘I ended up testing Rendin when the company did not actually exist yet. The service did not even have a name,’ says Reeli Simson of her first experience. ‘About a year later, the service was ready enough to be launched. And then we shook hands right away,’ she says. Thus, Lumi Kodud was among the first users of Rendin.

According to Simson, Rendin is a very good solution to use from a property owner’s point of view. 'The size of the deposit would not allow repairing a rental apartment if it needs repairs because of damage caused by the tenant or replacing something, such as technical equipment. However, protection by Rendin, which is ten times larger than the security deposit, is fully sufficient to cover the losses,’ she explains.

Should we experience problems with the tenant, we simply contact Rendin. ‘After submitting the damage claim, the problem is no longer on my desk. Rendin takes over the handling of the case and the damage procedures,’ says Simson. ‘We have been working together for a long time; we know the rules of the game and the conditions of how to formalise things,’ she concludes.

In many ways, Rendin makes renting more accessible for people. – Reeli, Lumi Capital

5 recommendations for all landlords

What are the tips that the representative of Lumi Kodud would give to a landlord?

Know your tenant – do a background check

‘Knowing one’s tenant or doing a thorough background check is one of the cornerstones of the rental business. I am convinced that, thanks to this, we have had relatively few problems with our tenants over the years.

In addition to the rent arrears check, the representatives of Lumi Kodud also carry out an additional background check to ensure the suitability of the tenant. When a tenancy agreement is signed, it is the responsibility of every property owner to make sure that they do not sign an agreement with a chronic debtor.’

Rendin’s background check:

  • Rendin has built the background check around a rent arrears check, a credit score, and previous customer experience.

  • Anyone wishing to rent a property through Rendin will be required to undergo an automatic background check using their Estonian personal identification code.

  • It is Rendin that takes the risk for the actions of the tenant, not the property owner.

  • The property owner will make the final selection from those candidates who pass the background check. However, each property owner may do additional background checks on their own, such as checking criminal records, Googling the candidate and/or checking their social media account.

Document the rental

‘All the materials related to the rental, such as the agreement and the handover act, must be in writing and properly done.

It is crucial to have an overview of the condition of the rental apartment before and after entering into a rental agreement. This evidence base plays a key role in resolving potential property and tenancy disputes. So, be careful how you do your business!

‘The landlord's attitude shapes the rental experience.’ – Reeli, Lumi Capital

Be open with your tenant

‘As trite as this may sound, I never tire of stressing that open communication between the property owner and the tenant is the most important thing! It is very important to create a positive atmosphere for the tenant and to reassure them that the property owner will help if they have any problems. Encouraging people to report problems as soon as they occur can prevent major losses. The attitude of the property owner largely shapes the whole rental experience.

What problems should the tenant report to the property owner? – Anything that seems sensibly relevant. From technical issues and faults in the rental home to late rent payments.

For example, Lumi Kodud has a technician service. Tenants can easily and conveniently report any technical problems. In fact, every property owner can map out in advance the contacts of the necessary service providers, who could help with different problems.

It is in the property owner’s own interest to react as quickly and quickly as possible and keep an eye on what is going on.’

Do not be afraid of tenants with pets

'It is a myth that tenants with pets are a big cause of problems. On the contrary, they are some of the most trustworthy people. They are aware that they are under special scrutiny by property owners, which makes them behave even more diligently.

In fact, property owners who allow tenants with pets are in a favourable position in terms of the rental market, as there are not many such property owners.

There has only been one occasion at Lumi Kodud where we have had to do a flooring repair. The tenant informed us about the problem and paid the costs.’

Photo: Karolina Grabowska, Pexels

Use high-quality materials for interior finishes

‘After five years of experience as a property owner, I can confirm that the use of high-quality materials in rental homes was one of the best decisions. This means slightly higher costs at the beginning, but fewer problems later on.

If the materials and (work) surfaces are durable and easy to clean, the tenant’s life will be easier and they will be more motivated to keep the apartment clean. For us, the advantage is that we do not have to constantly go and fix things. Everything will hold up beautifully and will not fall apart in your hands.’

Header image: Lumi Kodud

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