Most investors and a fair number of retail home buyers would never consider purchasing a property without a thorough home inspection. This is your opportunity to uncover problems and negotiate their resolution with the seller prior to closing the deal. The proper escape clause in your purchase contract also allows you to walk away from a potentially bad deal without penalty. But do you do careful inspections of your rental properties?
Most landlords will do a periodic walk-through of their rentals, perhaps prior to lease renewal or on some other schedule. But how meticulous are those inspections? Do you just want to see that the tenant is taking care of the place, or are you looking for signs of trouble? I have to confess that I was in the former category and it almost cost me dearly.
The Perfect Tenant
Many investors have had the tenant who must have been a direct descendent of Satan himself. The type that is always late with the rent, complains about everything, and is an all-around pain in the butt. The kind of renter you can’t wait to get rid of and look for any opportunity to evict. But every so often you get the dream tenants. Those are the ones that always pay on time, take care of little problems themselves, and never call you for anything. Exactly the renter you want – or is it?
I’ve had one of those tenants leasing a highly profitable rental for the past four years. The only call I had ever received from him was let me know he had made a mistake. He was practically hyperventilating when he told me he had forgotten to put a stamp on the envelope with his rent check and it was returned to him. He re-sent it immediately (still postmarked within the grace period), it was the only time he didn’t pay when the rent was due.
Like all my properties, I did walk-throughs to check it out periodically. The house was always taken care of and I never found problems of any kind. Then one day I did get a call about a problem. The tenant was actually apologetic when he told me that the circuit breaker kept tripping and he had no power. I assumed it was no big deal and called my electrician to take care of it. The next day the electrician called to tell me I had a major problem. Several receptacles were actually sparking and breakers that should have tripped didn’t. Why did this happen? The dream tenant didn’t want to bother me and tried to fix the problem himself. The electrician said that the way the breaker box was jerry-rigged could have caused a major fire – he was actually surprised that it hadn’t.
Since my tenant was not the assertive type he was afraid to bother me. I was all too eager to think everything was fine based on a perfunctory walk-through. The truth is I had gotten lazy. As an experienced, hands-on rehabber I would have spotted the problem had I bothered to check the electrical panel. The problem as not one that had just happened, rather it was one that occurred some time before but the tenant had tried to fix it himself. From that point on all my property inspections have included checks of electrical and plumbing systems. If there is any sign of trouble I’ll call in an expert. I remember hearing something once about an ounce of prevention; I’ll remember that from now on.
Trust not too much to appearances. – Virgil
Photo: R. Warren