You’ve heard it before: “You need to conduct a walkthrough of your property every six months.” But how many investors actually do that?
It might be simple for an investor who manages his or her own properties and is routinely there for maintenance concerns. But what about out-of-state investors? How do we solve that problem?
Even if you live more than 1,000 miles away from your rentals, you NEED to figure out a way to see your properties at LEAST twice per year. Here’s why.
Why You Should Conduct Periodic Walkthroughs of Your Investment Properties
In the Army, commanders will do what they call a “maintenance terrain walk.” Command teams will schedule visits to walk flight lines, hangars, and motor pools to get a general pulse on their organization—a pulse that is not felt from sitting at a desk behind a window.
This terrain walk is important, because it allows them to notice things that may be lacking due to poor resourcing, mismanagement, and sometimes even poor leadership. The command teams will talk to the soldiers and ask them how things are going and if they need anything.
Although most soldiers will remain tight-lipped, some of the more eager soldiers have no problem telling the command what the real issues are. When the command team is satisfied and feels they have seen enough, they will go back and process what they’ve seen before having a talk with subordinate commanders to address some of the issues.
Some people refer to this as the “dog and pony show,” because it often comes with a lot of showiness and fabricated morale. But in reality, it’s a necessary check and balance for the organization.
How to Conduct Walkthroughs of Tenanted Rental Properties
I recently scheduled a walkthrough of the properties in our portfolio. It had been almost a year since I had been in—or even seen—them, as we invest out of state. With much apprehension, the tenant finally agreed to let us conduct a walkthrough of the property at the requested time—seemingly hiding something.
(Important note: I HIGHLY recommend scheduling this visit WITH the property manager. Don’t do this by yourself if you aren’t the manager. Tenants can corner you into doing or agreeing to things that may not be in your best interest without the property manager. After all, you want your manager to know the same things you do about the property, so make sure they are with you.)
We didn’t mention anything about me being an owner. We simply stated who we were, why we were there, and what we were doing. We entered the house and immediately smelled cigarette smoke.
“Just a friendly reminder because we want you to get your security deposit back: you can’t smoke in the house. Period. The owner would have a HUGE fit if they saw this. We won’t say anything to them this time, but consider this a warning and make sure that smell is gone next time we come. Otherwise, we will have to charge you,” said the manager.
He shot me a quick glance, implying, “We’ll talk about it outside.”
I smiled and turned to continue my search. The tenant graciously apologized and was grateful that we were letting her off with a warning without telling the owner. She proceeded to tell us more about the home and what needed to get fixed.
We had earned her trust, and she opened up like a book: “The toilet has been a little leaky, too, and this door doesn’t shut all the way.”
I quickly acknowledged the toilet problem. On this particular property, I pay the water for the tenants. This water leak had been going on for a few months and had spiked the water bill by an extra $30 to $50 per month! The timing aligned itself with the move-in of a different tenant, so naturally it didn’t raise any red flags.
“We will have someone over tomorrow to fix that,” I said, as I wrote it down in my notebook.
The next issue we checked was the door. The entire door jamb had started to rot out in the year that I had been gone. How on EARTH does that happen? I didn’t know, but I knew it needed attention.
I looked at my manager and said, “Did you know about this?”
“She never mentioned the rotting. She mentioned that the door was a bit drafty, so our maintenance tech put thicker weather strips on it,” he replied.
That was just one of the homes that we checked that day. As our morning progressed through town, we noted a few more items that needed repair, some sloppy contractor work that needed to be addressed, and some overdue landscaping work that needed attention.
All in all, the walkthroughs saved us hundreds of dollars and helped establish good rapport with the tenants. One even told us that they’ve never had a walkthrough done before, and it seemed like the owners must really care about their home. (Yeah, I blushed a little.)
It was a morning well spent and an adventure we will continue as the months progress.
The Bottom Line: Walkthroughs Are Invaluable
A walkthrough of your property is INVALUABLE to you as an investor. You are the command team, and you need to get that pulse on your organization. A wise old investor once told me that, “Nobody cares about your property as much as you do.”
He was right. You need to get out and “inspect what you expect.”
It’s too easy in today’s world to not do this, and out-of-staters have zero excuse. FaceTime and other video platforms allow managers to keep investors in the loop on how things are going and what the true situation looks like in real-time.
The worst properties are the ones that are essentially forgotten about by their owners.
Do you think walkthroughs are a good idea? Why or why not?
Share your opinion in the comment section.