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The Importance of Doing Regular Inspections on Your Property

by Sharon Vornholt on March 26, 2013 · 17 comments

  
Inspection

Real estate investors that are seasoned landlords or property managers know how important it is to do regular inspections on their property.

If you aren’t in this first group then there’s also a good chance that you are one of the unlucky ones that found out the “hard way” that you should be doing regular property inspections.

I have a family member that is the manager of a large multifamily property in a nice neighborhood. The rent for these apartments ranges from around $800 to $1200 a month and there are over 500 units. They got a call recently from a tenant for a regular work order. When they arrived to do the repair, what they found was appalling. Even though they do regular bi-annual inspections, as you will see from the pictures provided throughout this post – they still find “surprises” all the time.

Which One of These Three Categories do You Fall Into?

#2

  1. You went to work for a large company that already had good systems in place for doing scheduled property inspections. They taught you good property management principles which you continue to follow.
  2. You are a newer real estate investor that doesn’t have these systems in place. You found out the hard way what you should be doing after a tenant moved out and left your place trashed.
  3. Even though you are a brand new real estate investor and you never worked for a property management company, you were somehow smart enough to set up your own systems right from the beginning.

What Type of Tenants Do You Have?

#7I have found that tenants generally fall into one of several categories.

Good Tenants. If you are really lucky, you have good tenants. They take care of your property just like it was their own house. They are responsible; they call you when there is a small problem before it becomes a big problem and the yard always looks nice. You won’t have any code violations from these types of tenants. If you are really lucky, these folks will become long term tenants.

Lazy Tenants. The next group of tenants is what I call “lazy tenants”. These people move in and never take care of anything. They don’t take out the garbage, they don’t clean the house, and in general they make a mess of everything.

Destroyers. The third group of tenants is what I call “destroyers”. They always do a lot of damage and no one really knows the reason. This may just be who they are; people that are incapable of taking responsibility for their actions or their life. These types of tenants feel no responsibility for taking care of your property.

Weeding Out the ‘Bad Eggs”

If you have single family homes, one of the best ways that you can weed out these last two types of tenants is to stop by for a surprise visit where they currently live before renting one of your houses to them. Just show up, knock on the door and tell them that #6you need to come in and speak with them. You can just be honest and let them know it is company policy to visit all tenants at their current residence before allowing them to live in one of your rentals.

If their current home is a mess, you can be sure yours will look the same. They will have a lot of excuses for “the mess”, but don’t let your need for immediate cash cloud your judgment. In your rush to find a tenant, you don’t want to “settle” for someone that you know won’t be a good tenant.

Schedule Regular Property Inspections

Most large multi-family communities have bi-annual inspections on their property. Some do these inspections even more frequently. The point is that they all have procedures in place not only for taking care of their property, but for dealing with those tenants that don’t follow the rules.

Whether you have just a couple of houses or a large portfolio of properties, this is one procedure you should begin to implement today if you don’t already have one in place.

3 Tips for Making It Happen

    #1
  1. Decide how often you will do the inspections. Most companies do at least bi-annual inspections.
  2. Put it on the calendar so that you can give the required notice to the tenants.
  3. Be sure to schedule “drive by” inspections in between your scheduled inspections especially during warm weather. Pay special attention to the condition of exterior of the property, look for unauthorized pets, and notice how they take care of the yard. If you notice anything that should be corrected, either give the tenants a call or send them a low key note. Your goal should be to turn them into good, long term tenants. If they are repeat offenders then you can take a stronger stance with them.

Have you ever encountered a tenant like this one? What is your policy regarding regular property inspections?

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{ 17 comments… read them below or add one }

Al Williamson March 26, 2013 at 1:23 pm

Sharon,
Those pictures are scary! I do inspections when I replace smoke alarm batteries. I think my tenants feel it’s less intrusive if I enter their units for preventative maintenance that isn’t related to them.

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Sharon Vornholt March 26, 2013 at 1:33 pm

Al –

This could easily be one of your units. It’s hard to get those inspections done, but it is really important. You should set up a procedure for getting it done.

Sharon

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Steve Babiak March 26, 2013 at 2:37 pm

I’ve seen worse – one I bought at a sheriff sale that had been owner occupied would make those pictures look sanitary!

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Sharon Vornholt March 26, 2013 at 2:43 pm

Steve -

Believe me; I have seen worse too especially in vacant properties. There is no way someone that can afford this apartment should live this way but sadly they do.

Sharon

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Jamela March 26, 2013 at 3:02 pm

Back in Minnesota our apartments were inspected at least once a year. Since I’ve moved to Michigan and been here for almost 4 years and our apartment has never even been inspected. I don’t see how a landlord can not inspect their property to see what is going on, and what kind of tenants they let in.

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Sharon Vornholt March 26, 2013 at 3:34 pm

Jamela -

Most large complexes have inspections twice a year here. But I would bet that the majority of investors never inspect their property. When the tenant moves out they often get big surprises. Thanks for sharing your experiences.

Sharon

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Dawn A. March 26, 2013 at 7:07 pm

In all of my rentals (even the one with two older adults) there are kids and every time I see the units there are kids toys and clothes and such all over the place. But there is a difference between being “messy” and actually being “disgusting/dirty”. I don’t have kids myself, so I’m making the assumption after seeing all these units that if you have kids, you just naturally have a mess! :)

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Sharon Vornholt March 26, 2013 at 7:24 pm

Dawn –

You are absolutely right about that. Kids and their “stuff ” really doesn’t count. Kids have a lot of stuff and they are messy. Being dirty; not doing what most folks would consider regular cleaning and throwing trash all over the rental is a totally different thing. That bathtub is gross. Thanks for your comments.

Sharon

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Karen Rittenhouse March 26, 2013 at 8:51 pm

Hi Sharon:
We schedule regular inspections and let the tenants know when we call that they can be there when we come by or not; up to them.

We had a woman call this morning who was scheduled for inspection this afternoon. She said the property was not ready for inspection and could she reschedule to give her more time to get the place ready and to have the carpets cleaned! Why, yes ma’am, you sure can!
We have rescheduled her for next week. There are many advantages to doing regular inspections!

Thanks for the great post.

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Sharon Vornholt March 26, 2013 at 9:30 pm

Karen -

I agree completely. There are many advantages to having clear policies. It sounds like your tenants know what you expect which is a good thing. Best of luck with your business.

Sharon

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Roy March 27, 2013 at 5:42 am

In our “House Rules” schedule attached as a schedule to the standard {government provided/decreed} lease, we state our policy of quarterly inspections and have the tenant explicitly acknowledge that clause. We also reserve the right to call in our cleaning service at the tenant’s expense, if necessary.

Even with that in-place, we still show-up and find things that make you shake your head.

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Karen Rittenhouse March 27, 2013 at 8:05 am

Wow! “We also reserve the right to call in our cleaning service at the tenant’s expense, if necessary.” Sweet!

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Sharon Vornholt March 27, 2013 at 8:13 am

@Roy – I love that term “house rules”. I would love to see what you have on your paperwork.

And I really love “We also reserve the right to call in our cleaning service at the tenant’s expense, if necessary.” Yes Karen, that is “sweet”.

Sharon

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Luciano Araujo March 27, 2013 at 9:31 pm

This is a good “wake up call” for a lot of investors including myself. I have 5 properties and I have had the unpleasant surprise when one of my properties was surrendered. I will be sure to setup my inspections and will take the advice mentioned in the comments to “check the smoke detectors”.

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Sharon Vornholt March 28, 2013 at 7:19 am

Luciano -

Depending on how many properties you have there are many ways to do this. I knew one landlord that had only a few properties and he came once a month on the 1st of the month and changed the furnace filters. Incidentally, he was usually handed the rent at that visit. Obviously that wouldn’t be practical for folks with a lot of houses. Just figure out what works for you and do that regularly.

Sharon

Sharon

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Michael April 1, 2013 at 6:56 pm

Good article Sharon. I have been acquiring a lot of properties and I agree with you on implementing inspections. Better to be proactive instead of reactive. I will be reminding my property manager on this again. Thanks.

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Sharon Vornholt April 1, 2013 at 8:13 pm

It’s all about having good procedures and systems isn’t it? I’m glad was a reminder for you. Thanks for your comments Mike.

Sharon

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