Rental Property Inspections: 4 Kinds and Why They Are Important

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I am always amused by the responses I receive from real estate investors when I ask them when they had last inspected their properties.  It is obvious from their contorted facial expressions that they most likely have never “formally” inspected their properties.

While preforming “safe and clean inspections” during a tenancy is important, ensuring that “move-in” and “move-out” inspections are performed at the beginning and end of a rental relationship can mean the difference between you as the landlord retaining all or a portion of the security deposit to compensate you for damages or losing it (possibly with triple damages) at the hands of a judge.

WHICH ONE SOUNDS BETTER TO YOU?

I am a huge proponent of inspections.  At the beginning, the end, and the entire time during the rental relationship. 

How did I get that way?  Simple…  I got my head handed to me by a judge and ended up paying triple damages.  OUCH!  Experience is a cruel and exacting teacher.

Regrettably, many landlords and way too many property managers have not assigned the same degree of importance to “inspections” as I have.  And this in my opinion, puts them at the mercy of the tenants, and if they are dealing with savvy tenants it will get painful!

What do you as a landlord do and what should you expect from your property manager regarding inspections?

Lets first start with some general definitions and a brief discussion regarding the four types of inspections I have found to be very useful as a landlord.

The Four Key Kinds of Landlord Inspections

1.  Move-in Inspection – This inspection, of course, is conducted during the move-in process.  It must be conducted by the tenant and it must be documented.  And, if you think you can move a tenant into a property without physically being present you are fooling yourself.  So, as part of your move-in package, you will have a “Move-in” inspection sheet(s). The tenant needs to walk through the property and document issues with the property that could be a deduction from their security deposit when they leave.  This inspection is not intended as a wish list for things they want done to the property. Of course, we are assuming the property was ready for the tenant or you wouldn’t have placed them. 

You want this inspection to be conducted by the tenant so that they can never say that they did not know the condition of the property when they moved in.  Once the inspection is completed, the tenant should sign and date the document and hand it back to you.  If there are issues such as a small stain in the carpet or a ding in the wall you should take a picture of it, print the picture and place it with “Move-in” inspection.

2.  Routine Safe and Clean Inspections – This is exactly what it says — a routine inspection, performed by you to ensure that the property is safe and clean.  This inspection should be conducted every 3 – 6 months; to go any longer and you may loose control of the overall condition of your property.  Realize that when you are conducting this inspection you are looking for issues which the tenant has caused, such as pulling a door off it’s hinges, and those items you are responsible for such as a leaking faucet.  Again, this inspection is documented, supported by pictures, signed by you with a copy provided to the tenant. If there are any issues, a follow-up inspection should be scheduled so you can verify the tenant has corrected the issues they are responsible for.  As for those issues you need to address, get on it!

3.  Drive-by Inspections – This inspection needs no pre-notifications. All you’re doing is driving by and observing.  Again, if there are issues observed on the outside of the property (the biggest one for me is typically pets that aren’t allowed), you should notify the tenant (in writing) and of course, schedule a “safe and clean” inspection.

4.  Move-out Inspections – The “move-out” inspection is your opportunity to determine the overall condition of the property when the tenant moves out.  This inspection should be conducted by you at the time you receive the keys from the tenant.  Realize that if you have the tenant drop the keys off at the office or put them in the mail, they will be able to deny everything you find on the “move-out” inspection because you weren’t there when they last locked-up and they will be able to blame you for all of the issues you claim when retaining their security deposit.  The only way to protect yourself is to conduct that inspection with the tenant in the property.  Ideally you want the tenant to sign the inspection findings, but many times the tenant will decline, believing that if they don’t sign they won’t be responsible.  One last item here — remember that your camera is your best friend; it is very hard for a tenant to deny in front of a judge what is obvious in a picture.

These four inspections can and will help you to keep your properties in good repair, hopefully well-maintained by your tenants, and protect you when you find yourself in front of a judge defending your security deposit decisions.

Best of luck!

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About Author

Peter is an active and successful real estate investor in the Baltimore Maryland region for the past 8 years and is one of the founders of The Club Mastermind a real estate investing coaching program focused on local coaches helping investors to perfect their game.

14 Comments

  1. Peter – This is a great guideline for landlords to follow. It never ceases to amaze me that people let tenants move into their property and they never check on it. They only find out after they have moveed out (in the middle of the night), that they have done thousands of dollars in damage to the property. Like you, I believe that if you have periodic, routine inspections, you can find these destroyers much more quickly and deal with them. Plus, it’s just good business to check on your investment.

    My daughter is a professional property manager of over 500 units. They have inspections every 6 months. If any problems are noted, the tenants have a set amount of time to correct them before being evicted. This includes “lack of housekeeping” as this leads to pests, mice and a whole slew of other problems.

  2. We usually visit our homes about every 3 months. We stop by with a new filter for the hvac and a battery for the smoke alarms. It gets our foot inside the door of our rental property.

    Jim

  3. Why is this simple task so inconvenient and sometimes painful? Or is it just me that feels this way? I’ve only been in this business for a few years, renting homes and making a profit, and the first few properties went like this… Find a tenant, collect rent, hope they pay on time and stay for a long time and never call. Well, come to find out the ones that pay on time and you never hear from is a bad thing, bad things happen when you don’t inspect. I learned the hard way. My goal is to own and manage hundreds of properties. I’ve learn to be successful the key word is “manage”. Take the time, take the inconvenient inspection and learn. Learn how people operate and build your business leading tenants.

  4. Pete,

    One of the 1st hoarders episodes illustrates your point. Food hoarder with dead animals within the house and untold damage. The condition had been that way for over 15 years.

    Jason

  5. Renata Dumervil on

    Peter,

    I really agree with you because if we neglect our property, we can I have strange surprise. For now, I just have a tenant who leave the apartment without told me. This my fault, because when I investigate her, she was a really bad credit and have criminal file, but I accept her because I have a big heart. For now, I must search another tenant. Like a beginner real estate investor I did a lot mistake and continue to do so but I learn a lot and I have no problem to share my mistakes.

  6. My question regarding this is: If they are responsible for damages, do you make them sign something owning up to the responsibility, or do you simply declare this wasn’t a problem at the initial inspection, so is thus their responsibility?

    Also, once you decide on the actions above (which are complex in themselves), do you add those cost to the rent, and when trying to collect, go with the pay notice or quit?

    I alway feel these type of income discussion need a little more attention paid to them, because we know thats what we should do, but its the how to do this effectively that gets us caught up. Any advice?

    • Lisa,

      It all starts with your lease andd your move-in inspection. If these are clear then the entire process is pre-scripted. If your location will allow you to add repair costs to the rent and then go to court to get that rent then that is a fairly straigh forward action.

      Most locations however won’t allow repairs to be added as rent, but they can be deducted from the security deposit once the tenant moves out… just be sure to do a move-out inspection.

      Good luck!

      Pete

  7. Two of my friends and I plan on renting a home in CT. Our landlord is in the military and won’t be in the country for awhile. He told my house mates and I that we have to hire a home inspector prior to moving in. I’m really new to this, since I’m only 20 years old and this is my first time ever renting a place from someone. I guess my question is, how does this whole process work?

  8. As a tenant, I understand inspections are important. However, my property management company is inspecting me monthly while Im paying $2,000 a month! EVERY month…this month its smoke detectors, month before that it was quarterly inspection, month before THAT it was to replace the filters in the air conditioner (which were brand new already) but makes NO REPAIRS!….what can I do besides move…I feel like I cant relax or enjoy my property.

    • Michelle, I’m a renter who feels the same way. We’ve rented this house for almost three years. We’re paying over the market rent. We always pay the rent on time, and rarely bother the PM. We fix the small things ourselves.

      I am at the point that if I have to go through one more inspection (the PM only started them last autumn) I’m getting out of here. Every three months this young kid arrives and goes through the place taking pictures and making comments. I ask him, what’s up – all the jobs at the TSA or IRS filled? At the end, he loftily pronounces the place “well taken care of”. I humbly thank my lord and master for the seal of approval and wonder if the pictures are kept well secured.

      Next thing I know the PM office is on the phone scheduling the next one. I’m getting out of here as soon as possible.

      • Michelle and Mary: I completely agree with your comments!

        I understand that rental inspections are important, but there is a fine line between keeping tabs on your investment and being unacceptably intrusive. I always pay rent in full and on time, and I take excellent care of whatever property I’m renting. In fact, my landlord has commented that she’d be thrilled if her other tenants cared half as much for their rental homes as I care for mine. I’m a very responsible, low-stress tenant who has never caused any problems of any kind.

        And yet I am subjected to rental inspections AT LEAST every couple of months. Frankly, I’ve had enough of it. I’m not paying $2200 per month to have my privacy invaded on a regular basis, and I’ve done nothing to warrant these regular intrusions. As soon as my current lease expires, I’m gone. I will not stand for such ridiculousness.

        Landlords should be aware that responsible, upstanding tenants do not want or need to be subjected to inspections every 5 seconds. If you are not conscious of this fact, you will LOSE good tenants who otherwise would’ve stayed, paid regularly and taken impeccable care of your investment properties.

  9. I have a question about selling commercial/Income property. What is the general custom
    regarding who pays for what, i.e., property inspection, closing costs, etc., buyer or seller, or
    is it a split? I know for residential property the buyer usually pays for property inspection, and
    closing costs can be split or negotiated. I will be selling a deceased relative’s small apartment
    building soon & need some answers. I am in the Southern California area.

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