Help Your Tenants Pass Their Move-Out Inspection

 

How to Help Your Tenants Pass Their Move-Out Inspection

Every skilled rental home investor knows that tenants can and should pass their move-out inspections. Sure, a little wear-and-tear is perfectly normal after a year or more of residence. But in reality, you want to give their security deposit back in full. You want them to pass the inspection with flying colors, with no major repairs or cleanup necessary after they depart. This means happy ex-tenants and an easy turnover process for you.

Your favorite tenants are rental pros. They do their move-in inspection thoroughly, they get every sock from every closet, and they're polishing their way out the door. Star tenants like that often get all or most of their security deposit back, to the delight of both parties. But not all tenants are so attentive. How can you help your young, inexperienced, or absent-minded tenants pass their move-out inspections to everyone's benefit?

As experienced property managers, Leaf Management can share a few helpful tips to achieve this lofty dream.

 

Walk New Tenants Through the Move-In Inspection

When new tenants move in, walk them through their own move-in inspection. This is especially helpful for young adults. College-age tenants might be renting their first real house or apartment. They may have never done a move-in inspection before. Showing tenants the checklist and how to take quick phone pictures that correspond with the list can be really helpful, and create that essential move-in condition record of the house that benefits both parties.

New tenants can quickly learn how to take notes. Show you are on their side by explaining how any flaws documented on move-in day are, by definition, not their responsibility when they move out. This will encourage really thorough note-taking and photos for a high-quality move-in inspection.

 

Emphasize Security Deposit Terms in the Lease

Tenants want their security deposit back when they move out, and you want to give it to them. To do that, they need to understand their duty to take good care of the house and repair - or responsibly request repairs - for any damage that occurs.

Show tenants the specific terms in the lease regarding their security deposit and consider using bold type in the document. Give tenants every chance to understand how they can secure their security deposits by maintaining the house, avoiding unnecessary damage, and reporting any serious problems immediately for repairs.

Tenants who really care about their security deposits will usually pay attention and take the necessary steps.

 

Mention Repairs in Annual and 6-Month Inspections

Most landlords or their property management teams conduct inspections every 6 to 12 months. When this happens, keep an eye out for scuffs, damage, or signs of other property issues. If you spot something, point it out to the tenant. If it's their responsibility, provide some tips on how to spackle and touch up wall paint, or offer to send over a repair service if it's a landlord-side issue.

Mention the duty of care and casually inject the idea of maintaining the tenant's security deposit return status if they take care of these little matters promptly. Sometimes, a friendly reminder of what can be gained from responsive repairs is all it takes.

 

When Tenants Plan to Go, Remind Them to Prepare for the Move-Out Inspection

When tenants let you know that they will be moving out soon, begin steps to help them complete their move-out inspection and, hopefully, get their security deposit back. 

During the conversation or email exchange, remind tenants that their move-out calendar is also a countdown to their move-out inspection. Provide a friendly reminder that now is the perfect time to finish or request any repairs so the house is in good condition when they leave.

 

Email Tenants a Copy of the Move-Out Inspection Form

Help out your tenants in completing the paperwork half of the move-out inspection. Email them a digital copy - ideally an editable PDF - so that they can get started inspecting and repairing any damage they find as they go down the list.

Tenants can then print out the inspection form as they load up the last of their boxes and may even complete the move-out inspection with detailed notes and photos. Some will, some won't But that email can make the difference.

 

Provide an Inspection Phone App for Easy Snapshot Documentation

You might consider upgrading your move-in / move-out inspection tech level. There are now pretty useful home inspection apps that make it easy to tap in notes using the phone softkey and even instantly attach photographs taken with the phone camera. 

For today's tech-savvy tenants, especially young adult tenants in Gen Z, a phone app can increase the ease of inspection and the chance that they will actually conduct the entire move-in / move-out inspection process.

 

Schedule a Pre-Move-Out Walkthrough with Repair Reminders

You can even take personal steps to help tenants realize issues they have overlooked with time enough to schedule last-minute repairs. Do a walkthrough with tenants as they are packing to leave and point out any issues that might affect their move-out inspection. Show them a comparison to their move-in inspection photos and provide a few tips for effective or affordable repairs before move-out day.

 

Emphasize the Security Deposit Opportunity

Finally, re-emphasize to tenants that they could get their security deposits back - in part or in full - based on how well their move-out inspection status matches their move-in inspection notes and photos. Anyone thinking about their moving budget and how nice that security deposit could be during their move is likely to take steps to spruce up the place and take good photos to improve their finances while moving in to the new place.

 

Improve Your Tenant Turnover Process with Leaf Management

Tenant turnover is notoriously the most challenging aspect of rental home investment. Not only would you like to find clean and well-maintained spaces so you can send those security deposits back, but you also need to tackle repainting, re-marketing, and screening for new tenants within few short months. With a skilled property management service like Leaf Management, we can not only help set your tenants up for move-out success, but also streamline the entire turnover process.

Investing in Historic Homes

 What You Should Know Before Investing in a Historic Home

 

 

As you expand your real estate portfolio, you may come across an opportunity to invest in a historic home. For many people, this can be an exciting prospect as you will be purchasing a piece of local history. Additionally, homes in historic neighborhoods are usually easy to rent and come with high appreciation potential. Unfortunately, these properties can also come with their own unique challenges as well. From restrictions on renovations to potential maintenance problems, some investors find that historic properties are more trouble than they are worth. Thusly, before you go investing in a historic home, it is important that you understand the challenges that can come with owning one of these properties. Keep reading as we take a look at what you should know before investing in a historic home.  

 

Potential Tax Benefits

As any savvy investor knows, the right tax breaks can make a huge difference in the profitability of your real estate portfolio. While historic properties often require a great deal of work and maintenance (more on this later), governments at the state and federal level often offer tax incentives such as historic tax credits to help homeowners preserve historic properties. You may even qualify for an easement, which is an agreement between the owner of a historic property and a preservation group whereby the owner's income tax, property tax, or estate tax is reduced. This can help offset the cost of renovating and maintaining a historic property significantly, increasing its profitability. You may even be eligible for multiple benefits, you'll just have to take the time to research what kind of tax benefits your historic property may qualify you for.      

 

Strict Regulations

Every real estate investor has a different strategy. While some rent out their properties and keep them as part of their investment portfolio, others prefer to renovate them and immediately sell them for a profit (which is referred to as flipping). If you prefer to flip the homes you purchase, a historic home may not be a good fit for you, as renovations can be one of the biggest challenges of investing in a historic home. There are often strict regulations that you have to follow when renovating a historic home, particularly if it is in a historic district or it is a designated historic landmark. Even doing something as simple as swapping out a sink or repainting the home's exterior may need approval if your property is a historic landmark. 

Before you purchase a historic home, you should find out what would be involved in seeking approvals for remodels and upgrades. You will then have to decide if you are willing to deal with the oversight that will come with any remodel. However, if you are up to the challenge, restoring historic homes can be extremely rewarding and provide a high return on investment. 

 

High Appreciation Potential

While putting up with the red tape involved in maintaining and restoring a historic property can be a nuisance, all of your hard work will likely be worth it as you should see a high return on your investment. This is because well-preserved homes in historic districts typically see appreciation levels significantly higher than other properties. In fact, on average, a historic property's value is about 26 percent higher than other homes in the surrounding market. This means that if you restore a historic home that needs a little work, or you simply hold onto a historic property for a while, you could see exciting profits from your investment. 

 

Higher Maintenance Costs

The cost of maintaining a historic home can be quite high, as it is not uncommon to encounter problems with older homes. Additionally, many state and local governments have specific upkeep requirements for older homes, which means that you may have to perform work on your historic home more frequently than other properties in your portfolio. Additionally, these regulations also often require homeowners to use historically accurate materials, which can further increase maintenance costs. While many investors still find purchasing historic properties to be worthwhile, it is important that you are prepared for the costs that can come with owning one of these properties and factor these expenses into your budget. Fortunately, tax breaks and credits can help offset these costs significantly.   

 

Attract Long-Term Tenants

If you plan on purchasing a home as a rental property, then a historic property is a great option. Not only are these properties usually in high demand, but they tend to attract long-term tenants, helping to reduce vacancies. Additionally, historic districts tend to have higher rent than surrounding neighborhoods, making historic homes great for generating passive income. Short-term rentals are also a great option for owners of historic homes, as these neighborhoods tend to be in high demand on websites like Airbnb.  

 

You May Have Problems With Homeowners Insurance

Prospective investors in historic properties may run into problems getting homeowners insurance. Since historic properties are so costly to renovate and restore, many insurance companies are hesitant to offer homeowners insurance policies on these properties due to how costly repairing a policyholder's home could be following a fire or other covered disaster. While there are insurance companies that specialize in providing homeowners insurance policies for historic homes, these policies can be very expensive. If you plan on investing in a historic home as a rental property, you will have to figure out whether the rent you would be able to charge would offset the high costs of insuring the property. 

 

Investing in a historic property comes with its own unique set of challenges, but if you are willing to put in a little time and effort, the financial rewards make all of the hassle worthwhile. Feel free to contact us to learn more about the process involved in purchasing and maintaining a historic home as well as to find out about your financing options.  

Pest Control 101

 Stages of Pest Control Every Rental Property Needs

Pest control. It's something every landlord has to think about, and the presence of vermin can cause problems that affect your reputation as well as potential legal consequences. So, what can you do to properly handle pest control on your rental property.

Here are the stages of pest control:

Pest Reduction Upgrades

The first stage is to do property upgrades that help reduce pest problems. These include:

• Sealing any holes in the walls, doors, and inside cabinets. Mice can get through holes the size of a dime. Avoid expanding caulk, which many pests will chew through.
• Fixing leaky plumbing, which pests can use as a source of water. Fill holes around the pipes with steel wool.
• Caulk crevices around cabinets or baseboards.
• Repair warped or broken doors and windows.
• Repair rips or tears in insect screens.
• Install bulbs with pink, yellow, or orange tints on all exterior lights. These are less attractive to flying insects.
• Inspect crawlspaces to look for rodent and ant nests.

You should do an "audit" for problems like this before renting the unit and also between tenants in case issues have developed.

Long Term Maintenance

Long term maintenance that is your responsibility can also help reduce pests. For example, trimming trees that overhang a house removes the "highway" squirrels might use to enter the property. Mulch should not be used right up against the foundation.

Arrange for pest control to enter each unit at least once a year. You may want to do it more often. Put this in the lease if you need to to ensure that tenants are aware. Most pest control services do not require that tenants move their property or not be in the unit when the treatment is done. You may have to do harsher treatments if tenants report a problem.

Provide tenants with an easy way to report sightings of significant pests such as mice, cockroaches, or bed bugs. Sightings of house centipedes should also be reported. Although house centipedes are not dangerous, if you have house centipedes, you have roaches.

Routine Maintenance

You can't always control what your tenants do. However, it's a good idea to educate them, especially in larger buildings where an issue can easily spread to neighboring units, on what they can do to keep pests out of their unit. Some tips you can pass on:

• Store all food properly, in sealed containers. Do not leave pet food out overnight. Cover the kitchen trash can.
• Empty the trash as soon as it is full. Take stacks of newspapers or cardboard to recycling promptly.
• Wash out containers that contained food before putting them in the trash.
• Reduce overall clutter
• Clean sink and tub drains with baking soda and vinegar regularly. This also reduces clogs.
• Clean regularly.
• Keep the patio or deck free of leaf litter, mulch, plant clippings, and standing water.
• Inspect packages for pests before bringing them inside.
• Promptly launder and, if possible, tumble dry clothing when returning from trips. Also treat clothing that has been in storage.
• Vacuum the bed and upholstered furniture.
• Close exterior doors and use screens if opening windows for temperature control.

Again, provide tenants with a way to report pests and encourage them to do so. Some pest control might be doable by you or your maintenance people, such as providing mouse traps. Keep a regular contract with a pest control company who can come in and deal with infestations both mundane and exotic. Discourage tenants from trying to treat a heavy infestation themselves, although it's not a terrible idea to provide information on simple things they can do, such as repellents.

A good property manager can help you find the right pest control service and give you advice on the best upgrades and long term maintenance to deal with Boston's common pets.

How to Handle Forgotten Property

 

What to Do If Former Tenants Leave Belongings at the Property

Tenant turnover is an important part of managing a rental property. When one tenant leaves, the landlord or their property manager must prepare the home to get back on the market and welcome new tenants. This usually involves a deep cleaning, repainting, annual maintenance, and a few routine repairs. But what do you do if your previous tenants leave items behind?

Left-behind items become a final matter to be resolved between the landlord and former tenant. Fortunately, there are a few best-practices that make this process easy to navigate to everyone's satisfaction.

 

Know Your State Laws

First, make sure you are familiar with the state laws regarding left-behind property. Some states have very specific procedures you should go through, such as how you should hold the property and the correct channels or timeline to alert the former tenants. You may also be in a state where there is no requirement, and it is entirely up to you on how to deal with the left behind property.

 

Determine If "Trash or Treasure"

The first step is to determine if the left behind property was discarded as trash or is forgotten treasure. There's a big difference between a broken bookshelf chair left in the garage and a backpack of keepsakes in the top shelf of a closet. Do your best to determine if the property is trash your tenants meant to leave behind (but perhaps did not have time to put out on trash bulk day) vs property they will want back that holds monetary or personal value. 

One stray sock is not a big deal, but a wrapped dress is probably a treasure. Use your best judgment.

 

Photograph, Then Store the Property

If you determine that the property is likely valuable, photograph it in place - where you discovered it or nearby where you unearthed it from a hidden storage location. You will send these photos to your former tenant to let them know about the forgotten property.

From there, respectfully pack away the items and store them out of the way where they will not be disturbed or damaged. This could be a sealed box in the attic or, for larger left-behind property, you might rent a temporary storage locker.

 

Alert Former Tenants of Their Left-Behind Property

You will need to contact tenants to return their security deposit - or the itemized list justifying denial. In this process, include photos and a list of the left-behind property with a letter asking the tenant if they want to collect the items or if it's okay to dispose of them. If you have a working phone number, you can call, but it's also best to leave a paper trail via email or certified mail, as well. 

The tenant may then be grateful that you saved something precious, confused because they forgot they even owned the lost items, or dismissive because they consider the left-behind items to be trash.

 

Give Tenants a Time Limit to Collect The Items

If your tenants indicate that they want the property back - or they do not respond at all - hold the property for a set amount of time. The usual interval is one to three months. Let your tenant know that the property will be disposed of if they do not collect it before this point. Give your former tenants the option to pay for shipping, pick it up personally, or send a friend in town to pick it up.

 

Charge Shipping or Disposal to the Security Deposit

If the tenant requests shipping, you can charge it to their security deposit as part of the clean-up fee. The same is true for any cost you incur storing the items or disposing of them. This is one of those things that the security deposit is designed to smooth over at the end of the tenant-landlord relationship.

 

Include Your Policy in the Lease and Security Deposit Terms

Finally, make sure that your left-behind property policy is included in the initial lease and is a clear part of security deposit terms. This acts as your legal protection and ensures tenants have a chance to know what will happen if they leave personal property behind.

 

Handle Tenant Turnover Easily with Leaf Management

Some landlords enjoy the turnover process. But if handling typical situations like left-behind property is a hassle, a property management team can make being a landlord worlds easier. At Leaf Management, we can ensure that your lease terms include important terms like how left-behind property is handled and we will always take care of the intricacies of the turnover process on your behalf. Contact us today to learn more about good rental property policies and how a property manager can help.