Ensuring Routine Inspections of Your Investment Property
Ensuring Routine Inspections of Your Investment Property
Owning a rental property can be a great investment, it can provide you both an income cash flow and equity appreciation within the property. With any investment, you want assurance that it is being properly maintained and managed. As a Property Manager, I conduct both exterior and interior inspections on a regular basis for my clients and the investment property.
Regular inspections of the property is of utmost importance for three reasons:
1. Ensure the property is well maintained.
2. Address any issues immediately.
3. Protect your income cash flow from the property AND later down the road you may decide to sell. You want to ensure the property will show well to prospective buyers.
Why are inspections of the property so important?
Listed below are my top 10 reasons why these inspections are important.
1. Prevent Unauthorized Tenants. It is absolutely critical that anyone above the age of 18 years of age that is a tenant, is on the lease. In addition to that, there are legal guidelines on the number of tenants of any age that can reside in a home. If these are not addressed, it can expose you to unnecessary risk. Routine inspections of the home will help ensure tenants are abiding to their lease.
2. Prevent Unauthorized Pets. This is important for a variety of reasons, most importantly, there can be breeds of pets that your homeowner’s insurance policy will deem as restricted pets. This can be costly for you if a restricted pet is residing in the home and a claim is being made. The insurance company could see this as violation and possibly void your claim all because of an unauthorized pet.
3. Prevent Unapproved Painting. Setting clear expectations up-front is the first step to prevent this from occurring. Any time a tenant paints the interior or exterior of the property, they should obtain approval from the Property Manager. Unapproved painting can be costly and if it is unproved, the tenant shall be responsible for cost if the walls need to be repainted. For example, I had taken over managing a property that was being self-managed by the owner. During this time, the prior tenant painted a series of walls an assortment of dark shaded colors. The prior tenant probably loved the colors they choose, however, not a single prospective tenant enjoyed it. The home had excellent features however the paint was a distraction. We ended up having the walls painted a neutral color, and this had an immediate impact and within days the unit was rented. Re-painting walls can require a lot of work and unnecessary cost (i.e. priming the walls, then painting with usually several coats) and this can be prevented with setting clear expectations up-front and with routine interior inspections. For this self-managed owner, since clear documented steps were not in place, they ended up bearing the cost of re-painting. With the properties I manage, clear expectations are set-up front, inspections are completed and if the tenant conducts unauthorized painting, they are responsible for the cost of re-painting the walls.
4. HOA Rules and Regulations. Every HOA will have a set of rules and regulations and some have specific guidelines in place for maintaining the exterior appearance of the home. If they are not followed, it can lead to unnecessary notices and even fines assessed against the property and the owner. This is easily prevented by conducting routine exterior inspections. I have a property that was self-managed by an out-of-state owner, however with owner being out-of-state, the owner was under the impression that everything was great. The tenants had resided there for several years. However, the exterior brush and trees ended up getting so overgrown and were unkempt. This ended up leading to a notice from the HOA and needed to be addressed. The great thing about having a Property Manager is that when you are out-of-state, you have peace of mind knowing that inspections will occur and situations like this can be prevented.
5. Prevent Overgrown brush and or foliage. Even if your investment property is not located in a deed restricted community, you will still want to ensure the exterior brush and foliage is well maintained. If not, this can lead to a variety of problems, as overgrown brush or foliage can be a nest for pests. Having routine exterior inspections done can prevent this from occurring.
6. Prevent Unauthorized Maintenance Performed by the Tenant. A tenant may think they are saving you money and or protecting their deposit by doing their own maintenance. However, this can not only lead to a variety of issues. Bad maintenance repair can be a real eye sore, or even worse, it can create a problem that can cost two or three times as much to fix versus having a professional fix the problem in the first place. A while back I had taken over a property where a prior tenant had performed their own maintenance while it was being self-managed by an owner. One of their pets did a significant amount of damage to an exterior door and the tenant replaced the molding around the door and installed a new door. At a quick glance, it looked cheaply done, once you inspected it closer the problem was much worse. The door was not properly installed, there was a significant draft and on top of that the door would not open/close properly. As a Property Manager, conducting a routine inspection catches this kind of stuff. In this situation the tenant could have been billed for having a professional properly fix the door, however it was not caught by the self-managed owner until it was too late and the owner ended up bearing the cost.
7. Ensuring the Unit is Kept Clean. Routine interior inspections of the property help ensure the property is being well maintained. In addition to general cleanliness, you can ensure many of the items mentioned previously are not occurring. In addition, you can also ensure no smoking is occurring in a non-smoking unit, there is no loose trash that can lead to unwanted pests, all of this and more is important to ensure the house is being well maintained.
8. Maintaining HVAC. Unfortunately HVAC units do not last forever, however, you can prolong the life of an HVAC unit if it is well maintained. Exterior inspections ensure there is not debris or foliage around the HVAC system. Interior inspections help ensure the tenant is regularly replacing the HVAC filter. In addition to this, I encourage my owners to enroll in a HVAC annual maintenance prevention program. A licensed and insured vendor that we work with will visit the unit multiple times throughout the year to perform routine inspection and cleaning of the system; this helps pro-long the life of the system.
9. Ensuring the Unit is Kept in Good Condition. These inspections can also help to ensure window blinds are not broken. There are no unauthorized vehicles on the property, especially an unauthorized non-working vehicle on the property, which can be an eye sore, even worse a violation of HOA Rules and Regulations. Ensuring no damage to the walls by not properly hanging items, no damage has occurred to tile, carpet and or flooring in addition to a wide variety of other things.
10. Documentation. This starts before the tenant even resides in the home. Having an attorney prepared lease prepared for the specific home is critical. Outlining the responsibilities for the tenant and owner are critical. While the tenant is residing in the home, it is critical to have documentation for any maintenance and or emergency maintenance requests submitted by the tenant(s). When the interior and exterior inspections occur, having proper documentation can help reduce risk and significantly reduce the risk of all the items that were previously mentioned.
As a Property Manager, I am here to help protect your investment. Routine inspections will provide you peace of mind and will help ensure your property is being well maintained.
Property Manager at Florida West Coast Property Management