This article was published in the October edition of Residential Resource Magazine and was written by Kevin Mackessy Broker of Blue Olive Properties in Highlands Ranch CO.
The current real estate market, though showing steady signs of recovery, still remains challenging in many areas of the country. For many property owners, selling remains out of the question, and they must face the dreaded “we have to move, but can’t sell” dilemma. Many owners wisely choose to rent their houses in anticipation of better markets ahead. As professional property managers, we are always happy to help homeowners with rental management solutions.
One very important question we always ask owners is, “Will you maintain this house?” Most say “yes, of course.” But many owners, who are now de facto investors, have no idea what can come up in the course of renting residential properties. Owners often have deferred maintenance issues that they have learned to live with. The problem is, as all property managers know, tenants are not as forgiving. Nor should they be. If an owner is going to put a house on the rental market, it must be in a safe, clean and fully operable condition. Many states have habitability laws that cover this very issue, but that is another discussion.
For now, we want to help homeowners make a successful transition to real estate investor. We always require that a home inspection be conducted on all properties we agree to manage. A good home inspection will give the homeowner a baseline condition report. A competent inspection will also head off potentially dangerous conditions.
Home inspectors conduct a reasonably fast, efficient and cost-effective inspection and complete the following functions:
• Perform a complete interior and exterior visual inspection, looking at the overall condition and cleanliness, giving recommendations on cleaning or painting needed.
• Conduct a visual inspection of all carpet, tile, linoleum and hardwood flooring. Make cleaning and repair recommendations.
• Inspect the water heater for proper operation, corrosion, or leaks, giving a replacement or repair recommendation. The life of most water heaters ranges from 8-12 years. If a water heater bursts, an owner could be looking at steep bills for water extraction, cleaning, and restoration services.
• Inspect the furnace and air conditioner for proper operation and cleanliness, making cleaning recommendations if needed, and ensuring filters are changed regularly.
• Perform gas leak tests on the fireplace, water heater, furnace, and gas stove. This prevents more costly repairs
Do You Promise
To Maintain This House?and potential safety issues.
• Check for any carbon monoxide leaks, and that detectors are installed and functioning properly. Carbon monoxide detectors are required by Colorado law. We recommend installing hard-wired combination smoke and carbon monoxide detectors, rather than using plug-in type detectors, which manage to find their way into drawers.
• Check for water leaks, proper operation and condition of all appliances, disposal, faucets, sinks, tubs, showers and toilets. Small leaks can get expensive in a hurry.
• Check all windows and doors for proper operation, safety, and condition.
• Conduct a visual inspection of the electrical panel, exterior siding, roof, and gutters.
• Conduct a visual inspection of exterior walkways, patios, driveways, decks, and railings.
Once the inspection is completed, we give a full written report with repair recommendations to the owner, especially in health and safety areas. For all properties we manage, the locks are re-keyed after the owner moves out and also between tenants. We believe this simple, yet often overlooked task, is essential in providing security and protecting both owners and tenants. As managers, we have a fiduciary duty to reduce liability risks for our owners, and an obligation to provide tenants with peace of mind.
Once all needed maintenance items are handled, the owner can rest assured the house is safe and fully functional, and we are able to command maximum value for the property. Taking care to repair small items early often prevents bigger problems down the road.
Our next step, once we have a good maintenance baseline, is to train our tenants on how to perform first-line preventative maintenance and how to watch for many other common maintenance issues. We use a comprehensive five-page maintenance agreement as part of our lease package, which clearly spells out owner and tenant responsibilities. This document allows both owners and tenants to have peace of mind. It also heads off any confusion as to who pays for what services.
So remember to always ask potential owners: “Will you maintain this property?” Then let them know the very real protections, benefits and peace-of-mind provided through a competent, professional inspection. Mention that you train tenants to watch for maintenance issues as well, and you will likely win yourself a long-term, happy, and well-protected property owner to add to your portfolio.