SFR with College Student Tenants, How to handle post-lease inspection?

Question

I am pretty pumped about buying my first rental property in Tempe Arizona! There are college student tenants currently occupying and whose lease is up in about 3 months. It occurs to me that I don't really know the condition of the property prior to them moving in and when they move out I will need to do an inspection. How can I know/prove if they have cause damages to the property without knowing the condition of it prior to their lease? Any advice is greatly appreciated.

Peter Tverdov · Answer

Did you do a home inspection? The home inspection can be very detailed and those guys aren't going to miss much. In certain towns, when you pass ownership from one owner to another and it is a rental property you need a 'Certificate of Inspection/Occupancy". Those inspectors would note items you need to abate. Between both inspectors I'd say you would have a starting point at least of what was wrong with the unit and if things were damaged afterwards you could charge them for the damages and cite the inspections.

Mark Stoker · Answer

Thank you everyone for your suggestions and experienced advice! I will perform an inspection when I take ownership and hope for the best.

Kelly N. · Answer

The above posters are correct, unless there is a move in inspection sheet, you really don't know what condition things were in when they moved in.  In my 2 years of experience at this, only about 50% of tenants return the inspection sheets.

The other thing you won't know is how DIRTY the place was before they moved in.  In our area, tenants are often moving in the same day the previous tenants move out, so units do not always get cleaned well in between.  I plan on a detailed cleaning job between tenants when it is the first turn over for us, and I plan on scrubbing 10+ years of dirt off everything.  I leave time between my tenants to clean and fix things if need be, I would rather loose a few days of rent than turn over a nasty apartment.  In a college town, this means you need to know when classes start, and try to schedule your leases accordingly so that there is time between tenants and that it is when people want to move.  If the current lease is ending close to or after classes start, you can always talk to them about leaving early and prorating the last month's rent to give you time to get the new tenant in.

Hope that helps,

Kelly

Ryan Swan · Answer

I think you're out of luck trying to collect for any damages they caused prior to you taking ownership without written documentation of the property at the time they moved in. As others have mentioned, I would do a walk through now to assess the current condition with the tenants present and put it in writing.  You'd be justified to keep some deposit money for any damage between now and move out.

If this is a traditional sale, make sure the current owner held deposit is credited to you on the HUD-1 at closing.

Paul Santos · Answer

@Mark Stoker Congrats on your investment. I would love to keep hearing about your experience with that property. Hopefully you keep adding posts with updates. Good luck.

Pravin Chaudhari · Answer

When I bought my 1st investment property(short sale) here in Phoenix, it had no record of move-in inspection. I ended up doing what @Daniel Mohnkern suggested - did move-in inspection on the day of possession and used it for the move-out.

Daniel Mohnkern · Answer

If the previous owner didn't keep any record of move in condition, I would record current condition vs move out condition.  It isn't the best option but it is probably better than nothing.  It gives the benefit of the doubt to the tenant, but there may be no better way to do it.  Anyone have any better idea?