The Importance of Regular and Organized Property Inspections

The implementation of a regular inspection process during the tenancy is an item that many landlords overlook. However, this is an important part of the tenant cycle.

We conduct thorough and standard property inspections at our managed rentals throughout each tenants rent cycle. 

Doing this helps us a great deal in the overall management process of a property. Here are a couple of reasons the inspection is valuable and a few things you can do to have a successful inspection process.

A regular, in-tenancy property inspection is key for two reasons:

1) It keeps you fully informed of the property condition so you can anticipate needed repairs.
2) It shows the tenants that they will be held accountable for the properties condition during their tenancy.

There are many ways to handle the property inspection. We suggest you have a full inspection three times per year. It is best to conduct the in tenancy inspection the same way you would handle the move in.

By full inspection, we mean a detailed, logical, formal and consistent procedure. It is important that you establish a set time with the tenant and make sure that they know that you will be taking photos. Then, you basically handle the in-tenancy inspection the same way you would handle the move-in inspection.

For help regarding how to conduct the in-tenancy inspection, you can read our Move in Inspection  tips or check out the RPM YouTube Move In Video.









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The Reward Time Of The Tenant Cycle

Over the last couple of months, we have covered several elements of the tenant cycle. We have reviewed tenant qualification, the lease signing, move-ins and the first month. At this point, you have done a great deal of work.

OK, so  the next part of the tenant cycle is the accept the rent check and smile part. Right?? Well, not exactly. While this is time the in the tenancy that should be easiest, there are a couple of steps we recommend you take.
The first step is to conduct regular inspections. We recommend having an inspection three times during a 12 month tenancy. We suggest taking pictures and completing a checklist to detail any issues you may see.
The main thing the property inspection does is give you a clear view of how the tenants are treating your property. With this information, you can anticipate repairs that will be needed, take action to fix a problem, or you can decide if you want to extend a lease renewal to the tenants when the time comes.
The regular inspection also sets up a form of accountability for the tenants. It is important that they know that you will be evaluating their performance as a tenant as much as you expect to be evaluated by them.
The next suggestion we will give you is to respond to your tenants requests and concerns in a timely manner. The goal is to keep a good tenant in your property as long as you can.  
If your tenant calls you because something is broken, attempt to have your vendor contact them within 24 hrs. If you are responsible for landscaping or pool services, make sure your guys are showing up and doing a good job.
If you implement the above suggestions and you have done a good job with the previous steps of the tenant cycle, this time should be smooth sailing.
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Rent Collection Advice: Part 2

Last week, we went over some important aspects of rent collection.Today, we will go over three common situations we see regarding late paying tenants. We will also give you some strategies that you can take when faced with these situations.


Situation #1 – The tenant constantly pays late and won’t change their behavior.

We mainly see this happen when we acquire a property and the owner’s existing lease has low late penalties.

We have actually had tenants tell us that a $50 late fee is no big deal and they continue to pay late every month until they are required to sign a new lease.

The simple solution to avoid this problem is to set stiff late fees in the lease. We suggest 5% of the rent after it is deemed late and $20 per day each day after that. This step will eliminate most chronic late rent payers. Those that still miss the on time window because they are disorganized or can’t remember will pay you a hefty late fee.

Situation #2 – A continually late paying tenant has not paid the current month’s rent. This is the situation that is usually the worst for the owner. 

The solution here is as follows: make sure you communicate with these tenants immediately. If they don’t answer at home or on the cell, call their work, references and stay on it. You can also call from a blocked number or your friends number so they will not dodge you.

The goal is to assess the situation and determine whether they have the funds or not. Interestingly, we have found that if the tenants do have the funds they will engage with us in with angry demeanor and give us a date when they will be in to pay.

If you determine that the tenants do not have the funds and have no chance of getting them, the goal is to get them out of the house as quickly as possible. We find that when the tenants fully understand the negative implications that an eviction will have on them, they will be cooperative about just turning the keys in and moving their stuff out.

As a landlord, if you can avoid going to eviction, you will save yourself a good deal of money, lessen your aggravation, and get your property back into the rental market sooner.

We have actually found that if the above situation is handled correctly, some tenants can be very agreeable. We have had tenants move out fast and when they got back on their feet, paid back the rent the landlord lost while the property was vacant.

Situation #3 – A routinely prompt paying tenant suddenly does not pay the rent.

Again, the key here is to talk with these tenants immediately. We have found that this situation is not as bad as situation #2. This situation usually happens because of a sudden job loss or other unusual financial issue.

In the past, we have had success with tenants in these situations by explaining ways they can get the money until they can find work again. We make suggestions to the tenants like taking a cash loan with their car as collateral or getting city assistance or asking for help from their family.   

In summary, when a tenant pays late, the main thing is to reach out quickly. When you make contact, get to the root of the problem and come up with a resolution that minimizes negative consequences for both parties.








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Rent Collection Advice: Part 1

Last week, we went over some of the situations that occur during the first month of tenancy. Today, we will review a few aspects of rent collection. This is another part of the tenant cycle that a property owner should have a decent grasp on.

If every one of your tenants paid on time every month, there wouldn’t be much to review. However, even when this occurs, we still see many landlords that will accept cash or personal checks.
Taking cash from a tenant that consistently pays on time seems innocent enough. However, if the tenant can’t pay and taking cash has been the precedent during the lease, this innocent procedure will really cloud up facts during court proceedings to evict the tenants.
We have seen instances where the tenants say they gave the owner cash (never did) to buy themselves more time at the property when they can’t pay.  The worst thing is that some of the courts will side with the tenants in this situation even though they can’t come up with a receipt.
Accepting personal checks is a bad idea.  Also, surprisingly, most bank’s online auto pays are not guaranteed.

As an owner, it is best to insist on a money order or cashier’s check. Yes, it will put the tenants out a bit but this type of required payment is a condition of a lease that a good tenant will completely understand.

Another thing that is a critical regarding rent collection is to have a clearly defined process regarding late payments and when the rent is due.
If you have a grace period of a couple days, make sure during the lease signing that the tenants know that this is a grace period and notwhen the rent is due. We hear the following all the time on the 5th (when the rent is due on the 1st with a three day grace period): “I’m only one day late, what’s the deal with the late charge??” If you cover this, you can gently remind them with a “remember at the lease signing we said…….”
Also, stick to your policies regarding late fees. Waiving late fees is a bad precedent to set to the late paying tenants and it is not fair to other tenants you have (with the same policies) that do pay on time.

Next week, we will review rent collection a bit more and feature situational advice and knowledge from RPM’s West Valley’s tenant relations guru. 
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Important Notes About First Month of Tenancy

Last week we went over some key points regarding the move in procedure. At this point in the tenant rental cycle, you have completed several elements. You have screened the tenants, showed them the property, ran the background and credit, conducted the lease signing and moved the tenants in.

Now it is time to kick back and collect the rent. Well, not exactly. After the move in, while most of the heavy lifting is done regarding this tenant cycle, we have found that the first month of tenancy is sometimes disappointing for the owner.

The main reason for this disappointment is that the first month of tenancy usually is the month that has the highest tenant maintenance costs.

One reason for this is that the home has been vacant since the last tenant moved out. Vacancy sometimes has a negative effect on household systems that are not used while the property is vacant. An example of this would be the seals or flappers going bad on a toilet that had no problem before.

Another thing we observe regarding maintenance in the first month of tenancy is that items that may have been ignored or not called in by a previous tenant are now noticed and reported by the new tenant. Items like a toilet running, garbage disposal not working or windows not locking.  

It is important to adhere to items 2 & 3 on our tenant retention  post. It might be frustrating to use some of the first month’s rent on maintenance items but the tenants will notice how you respond since this is also the first month you will be their landlord.

This is a good time to make sure the tenants use common sense regarding simple fixes and for you to draw the line on what a needed fix is and what is petty. The tenants also need to be advised that if they are causing items to break, they will be held responsible.

As an owner, you should be responsive to needed fixes at the property but shouldn’t have to be called constantly regarding trivial matters. Also, keep in mind that monthly maintenance costs are normally much lower after the first month.

  

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