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Property Management Blog

Published on Saturday, March 15, 2014

10 Ways to Prevent Damage to Your Rental Units

2. Record the property condition when the tenant moves in, with the tenant present. Go over the details with them, and have them sign a move-in form that notes the property condition. Drive home the point with a video or photos. The tenant will get the message: if the property is damaged after today, they’ll have to pay!

3. Give the tenant every reason to believe that, if they take care of the property, they will get every penny of their security deposit back. Your reputation with deposits may come into play as tenants talk to one another — former and current. The real value of the security deposit is not covering anticipated losses; the value is in creating the incentive for the tenant to care for the property.

4. Inspect the property periodically. These inspections are more than just checking up on the tenant. Ask about repair needs, and check out major systems on a regular basis. Often, if a problem is caught early on, the damage will be isolated, or avoided.

5. Jump on repair requests. Sometimes the repair is the tenant’s fault. But intimidating tenants will only discourage them from reporting problems. After a repair request has been answered, call up the tenant and ask if the repair was successful. Thank them for bringing the problem to your attention. In the short-term, repair complaints are a headache. But in the long-term, they save money and keep the property in good condition.

6. Even the best tenants eventually will wear out the unit. As you update your property, spend some time looking at the latest finishes, appliances and flooring. Some improvements are so drastic — so much more resilient — that it may be worth the money to switch them out. Rental homes need finishes that can take a significant level of wear and tear.

7. Water causes billions of dollars of damage each year. Even landlords in modern buildings are seeing damage from the use of new materials that aren’t holding up as well as anticipated. Much of that damage comes from the inside through faulty plumbing. Those leaks can spawn mold and other costly repairs, so it pays to inspect regularly.

Tenants are a common cause of water damage, from an unattended washing machine or dishwasher to over-watering plants.

8. Pay attention to utility spikes. Whether you pay the utilities, or your tenant complains about a sudden increase, take it seriously — that’s a warning sign that something may be spilling out. It can also signal a drug manufacturing operation — and that’s one of most costly repair jobs you will ever encounter.

9. Watch the weather. Storms cause significant property damage, and lately we’ve been seeing some monsters.  Once the surge is over, check for roof damage, clogged gutters, and poor drainage that may leak into the foundation.

10. Encourage tenants to carry renters insurance. The main benefit: they won’t ask you to reimburse them for damage. The indirect benefit is making tenants aware of just how much they stand to lose if they are careless and cause damage to the property.

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Landlord Knowledge Base

If you’ve ever considered investing in a few rental properties in Philadelphia or Bucks County, PA now might be a good time. Prices are still low in Philadelphia, but have been on the upswing. According to the National Association of Realtors, the median price of an existing home in a US metropolitan area grew 13.7% between July 2012 and July 2013, the latest in a 17-month streak of year-over-year price increases. 

New landlords can choose from properties that are likely to appreciate and a large pool of potential renters.Licensed realtor Pat Mueller cites a few reasons for this trend: “Many families have lost their homes to foreclosure and are entering the rentals market for the first time in years. Mortgages are also harder to get now, so fewer people are qualifying for a new one.”The more skills you bring to the table to get into Houses for Rent in Philadelphia Philadelphia or Bucks County, PA and the more time you have to devote to your properties, the faster you can make a return on your investment. 

But investing in rentals can also be disastrous (or too stressful to be worthwhile) without expertise. Here are three professionals you may consult about your new rental properties, and what you can do to mitigate how much they cost you:Handyman:  You may need to hire a specialist for some work on your rental. If you need new outlets or new pipes, for example, hire an electrician, plumber or licensed contractor. Handymen usually tackle smaller, more manageable tasks, like:

  • Painting and paint removal
  • Drywall repair
  • Minor appliance repairs (fixing a leaky toilet or faucet, among others)
  • Installing tiling or flooring, moldings, windows, doors
  • Refinishing decks, cabinets and other wood items

When You Could Skip It: You could do any (or all) of these projects yourself if you have the time and interest in learning. Of course, this only works if you live relatively close to your rentals and are flexible enough to service them on short notice. And if you’re willing to respond to the occasional 5 AM basement flooding.

Average Savings: Any base rates or costs-per-hour vary from location to location in Philadelphia or Bucks County, PA , but nationally, you can expect to spend an average of $60 to $85 per hour for repair costs. It general costs less to hire an individual handyman than a handyman employed by a company. Expect an additional charge if your job requires a trip to the store for materials.

Resident Property Manager As the owner of a handful of rental properties, you may be able to manage them yourself, but if you want help, a single resident manager would probably be more cost efficient than a property management company. Resident managers may:

  • Serve as a handyman
  • Advertise vacancies in your units
  • Show apartments to prospective tenants
  • Review rental applications
  • Collect rents

When You Could Skip It: Again, the closer you live to your properties and the more spare time you have, the less likely you are to need a manager. The obligations of being a boss will also cut into the time you save on maintenance.

Average Savings: The national median wage for residential managers is just over $25 per hour. Research the wages in your community and adjust according to how much responsibility your manager will take on. 

Real Estate Agent: Once you’ve gotten your financials in order and done your own research on the neighborhood(s) you’re considering, you might contact a realtor to show you potential properties. You can also arrange for a realtor in Philadelphia or Bucks County, PA to show rentals once they’re ready to rent.

When You Could Skip It: It depends. Even if you’re a local, or have thoroughly researched the neighborhood(s) you’re considering, a realtor is a great resource for a first-time rental buyer. Realtors have access to data and statistics not necessarily available to the general public and first-time buyers may not know all the right questions to ask. Using a realtor to fill your Houses for Rent vacancies is less of a no-brainer, depending on your other time commitments or whether you plan to hire a resident manager who could do the same thing.

Average Savings: As a buyer of rental properties, as when buying your own home, sellers typically pay most, if not all, of the buyer’s realtor fees. In this case, Mueller points out there’s little reason not to work with a realtor. For help in filling your units in Philadelphia or Bucks County, PA, the services of a realtor would set you back between 10-20% of the unit’s rent per month.  Mueller recommends interviewing with several brokers before making your final decision to invest into Houses for Rent .

The Bottom Line: As a new landlord, you can’t necessarily control the flexibility of your schedule or the amount (and cost) of unexpected repairs to your properties. Rentals are a long-term investment. However, to maximize profits from your Houses for Rent, new rentals, you can buy close to home and start small. It is best to begin with just one or two properties. This will allow you to maximize the time you spend on your properties’ needs, and minimize the amount you’ll have to pay anyone else.

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