How often are you expecting Property Managers to walkthrough

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How often are you expecting Property Managers to walkthrough

D Higgs
NJ · Member since 2019 · 61 posts · 19 votes

Let's say you have your property, and everything is going according to plan with your REI. How often do you want your PA doing a walkthrough of your tenant occupied units? Is this allowed? If so, is there a difference between PA's in regards to visiting tenants proactively?

I would imagine, and respect the fact that tenants have a right to their privacy.. HOWEVER, as the property owner I would want to ensure my investment is being taken care of. Not to mention notice any potential problems before they happen. I would just like to know what proactive steps can my PM do and what is the typical expectation?

Thanks BP!

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Patricia Steiner
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
7y

What does your lease say about owner/PM inspections?  A landlord/PM has the right to be at the property (exterior) at any time.  I drive-by mine and my clients' properties on a routine and regular basis.  The tenants are use to seeing me around and it's a friendly exchange when we do see each other.  As far as interior inspections, our lease contracts state how much notice will be given but does not stipulate how often.  Twice annually should be a minimum in my opinion.  I find that most PMs and owners do not do them at all.  

Having said this, I do respect the property as the tenant's home - and I call it that when visiting.  And, I want them to remember that someone else invested a whole lot more than they are paying in rent to purchase and maintain it. Respecting the property is non-negotiable.  Inspections support that message.  

So check your lease first - and then make sure your PM agreement stipulates your expectation for completion/documentation.

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  • Brent Crosby
    Rental Property Investor · Farmington, UT · Member since 2018 · 171 posts · 148 votes
    7y

    @Dennis A Higgs Jr mine does every three months and I would tolerate nothing less than every six. Otherwise you are asking for trouble. Ignorance is NOT bliss in this business, it’s a timebomb.

    1Reply
  • Yogesh BhadanePro Member
    Rental Property Investor · Fairfield, CA · Member since 2019 · 54 posts · 8 votes
    7y

    @Dennis A Higgs Jr I just bought a brand new house and having my PM do bi- annual inspections with proper report out. And yes I am paying my PM separately for doing those inspections professionally.

    1Reply
  • D Higgs
    OP
    NJ · Member since 2019 · 61 posts · 19 votes
    7y

    @Yogesh Bhadane

    G Morning! If you don't mind me asking.. how much of a separate cost is this? Trying to get a ballpark for when I start reaching out

    0Reply
  • D Higgs
    OP
    NJ · Member since 2019 · 61 posts · 19 votes
    7y

    @Anthony Wick

    Thank you! The problem, for me at least, is I have little to know experience in handy work. With that said, I know my weaknesses which is why I wanted to factor the possible costs and responsibility on to my PM

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  • Peter TverdovBusiness Member
    Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
    7y

    I run a property management company in Central NJ. Our Lease states that we do it quarterly for both residential and commercial spaces. 24 hours minimum notice is given. For the student rentals we manage, we do it monthly. Students will behave like wild animals in a house if you let them.

    The inspections are part of our 8-10% flat fee that we charge for management.

    [email protected]732-289-3823
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  • Jeff CopelandBusiness Member
    Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
    7y

    Interestingly, one aspect that no one has brought up is how often is your PM staff in the unit already for other maintenance issues? We have a very open line of communication with our tenants with regards to requesting maintenance (they can enter a request online via our PM software), and I'd say it's exceedingly rare for us to go more than three months without entering a unit for a maintenance task requested by the tenant. 

    Of course, we take a look around while we're there, and we get the "Oh, by the way, the ____ is broken too" - but the fact is we were inside the unit and confirmed all is well, without having to schedule a formal inspection. 

    For this reason, we generally don't plan or offer scheduled inspections. That's not to say that we wouldn't or can't, but I too have found that all landlords say they want scheduled inspections, but no one wants to pay for them. Not that they would be terribly expensive - most of our maintenance and admin staff earn $15-$20/hr, so the labor cost would rarely exceed $50 per inspection. But when you operate at scale with hundreds of units, this could easily become a full time job.

    I realize there's an argument for including this cost in the management fees, and we have experimented with this. We tried offering a "basic" level of service for 8% of rent collected (which included a move-in and move-out inspections, and other inspections only during routine maintenance) and a "premium" level of service at 10% (which included quarterly inspections and other perks). Not a single owner ever opted to pay more for the premium service, so we discontinued it.

    Copeland Morgan LLC4.770 Reviews
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  • Nicole Heasley Beitenman
    Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
    7y

    Once or twice a year. 

    0Reply
  • Ryan DenmanPro Member
    Erie, CO · Member since 2018 · 44 posts · 14 votes
    7y

    I would say the frequency of walkthroughs should be every 6-9 months, unless there are signs of the property not being taken care of and then they should be more frequent.  This of course should be spelled out in the lease and proper notice given before the walkthrough.  

    Walkthroughs are also great for catching little maintenance issues that the tenants might not be reporting, but could cause issues if left unfixed.

    It was humorous at one a walkthrough I did on a property, that when I delivered the notice a few days before, the outside trash bin was closed, but as I arrived for the walkthrough it was overflowing!  Periodic walkthroughs can be a good little nudge for tenants to do some spring cleaning.

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  • D Higgs
    OP
    NJ · Member since 2019 · 61 posts · 19 votes
    7y

    @Ryan Denman

    Thank you! What if you DO find clear signs of negligence or lack of cleanliness? I can think of examples, short of physical damage, that would be not only concerning... but a violation of their lease correct?

    Again, thinking worst case scenario, am I correct thinking my leverage is the tenant lease?

    And question #2... how can I go about denying the renewal of their lease? Is that a simple process if it comes to that?

    0Reply
  • Account Closed
    Rental Property Investor · Central, FL · Member since 2016 · 950 posts · 821 votes
    7y
    Originally posted by @Andrea Townsley:

    @Anthony Wick

    I like your strategy and as a renter myself, I wouldn’t mind it at all if it was phrased like this.

    Our initial lease stated that they could do inspections quarterly. A lot of leases state that but I’ve NEVER had a landlord actually do it. These people wanted to do it more often than is allowed and I finally told them no and told them quarterly are these dates: x, y, z remaining in the lease term. It was very awkward to just have someone walk around our house looking at stuff and truthfully I have no idea what they were looking for.

    When we renewed they dispensed with the inspection clause, thank goodness. It really just felt like invasion of privacy and trying to catch us doing something wrong.

    But if it was phrased like you said as a maintenance inspection, that would make me feel more comfortable, and every 6 months is more reasonable than quarterly.

    All that said, we became landlords unintentionally when we had to move out of state. I wish we had done some kind of inspections bc our initial tenants absolutely trashed the place just due to their lifestyle and cost us about $15k. Second tenants had holes in the walls, an exterior door they had busted in, wood floors ruined. Several grand more to fix that up. It would have cost less to fly down every six months to take a look.

    I always try and look at this like a business.  Ignore the whole tenant thing.  As a business my business is to provide a clean, safe, and functioning property to a tenant.  The tenants  responsibility is to maintain it or report any issues going on.  Since most people in my asset class I’ve never owned a home they need a little assistance so us doing quarterly maintenance inspections to ensure that the air filters are changed that the battery to the smoke alarms is working in the smoke alarms work and there is no ongoing issues or damage to the property intentional or accidental.  

     I’ve also found at least in my experience that doing the quarterly inspections and fixing those minor little things  makes for lower tenant turnover that ensures longer residency per tenant. Since turnover is the highest cost is a landlord you want to keep it to a minimum. So if I can spend $100 a year fixing little knickknack items for a tenant and spending money to ensure that the property is functional and they stay there for five years longer than they would have that as a win for me. 

    Like @Jay Hinrichs said about the whole 8% return versus 7% return.  That in my opinion is a new landlord with short sided views, or someone that needs the monthly cash flow to live themselves.  

    For the OP, quarterly inspections for MX has worked well for me. 

    0Reply
  • Randall Weatherall
    Real Estate Agent · Memphis, TN · Member since 2019 · 261 posts · 253 votes
    7y

    If they don't have something already set up in the PMA, then you can request it every (typically) 6 or 12 months.  Luckily in TN, we have 24-hour notice laws in place so if we need to get in, it's fairly simple and straightforward, but you have to have a decent reason in case they push back, but that's rare.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    7y

    Many PM will will charge 8% and do no inspections. They charge 3/4 to full month for leasing and they may charge for lease signing. They charge for every service call. They take the late fees for themselves to offset collection efforts. They charge per inspection and of course charge to fix anything that comes out of an inspection. 

    This is what leaves me scratching my head and wondering what the 8% if really for. It seems to basically pay for software portal, accounting, admin and profit. That is the danger is you may allot 8% and end up paying double that. 

    I don't fault the PM. They are running a business and want to charge fees to make money. 

    1Reply
  • Yogesh BhadanePro Member
    Rental Property Investor · Fairfield, CA · Member since 2019 · 54 posts · 8 votes
    7y

    @Dennis A Higgs Jr I am paying $50 per inspection.

    0Reply
  • D Higgs
    OP
    NJ · Member since 2019 · 61 posts · 19 votes
    7y

    @Yogesh Bhadane how often?

    0Reply
  • Yogesh BhadanePro Member
    Rental Property Investor · Fairfield, CA · Member since 2019 · 54 posts · 8 votes
    7y

    @Dennis A Higgs Jr two visits per year ($50 each visit)

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