RENT READY CONDITION
To know what the right improvements are is to understand the tenant mindset. There are certain improvements known to give you the most bang for your buck.
Tenants are not responsible for the cost of the repairs to the furnace or the roof. They don’t find value in your new windows and retaining wall. They care about the way the house looks and this is something that you won’t change once they are your renter.Kitchen, bathrooms, and living areas are what sell your home.Even if your house is old, it can still look its best with the right improvements.
The three ways to get the best return on investment for your rental are :
Your property should truly be sparkling clean. The best prospects have discerning standards. This has a dual effect of setting expectations high with the tenant and showing them just how you do business! Setting the standard early will help you later down the road.
2- PAINT/ WALLS
There shouldn’t be wallpaper or vinyl, unless it’s very modern looking. Walls should be patched and sanded prior to painting. Paint colors should be neutral and professionally painted for the highest quality. Don’t try to save money on paint, it will cost you more in the long run. High quality paint is one of the best investments you can make in your property because it covers in one coat and holds up over time.
3- FLOORING / CARPET
The floors should be at least relatively modern or desirable. Outdated or ugly carpet, vinyl flooring, and other types of flooring can drastically reduce the desirability of a rental. Taking into account that these improvements go a long way and are less costly than others, flooring makes the cut for best return on investment.
WHY IS CLEANLINESS SO IMPORTANT ?
All rental properties should be both shown and delivered hotel clean. All appliances should be pulled out and cleaned inside, outside, and underneath. All floors should be cleaned. Carpets should be professionally cleaned if not in excellent condition already.
Cleanliness helps to not only set the expectations of how you treat your property and expect them to treat it, but it also makes the property considerably more desirable.
Be sure to keep the appliances in line with the house. If you have a high end house, high end appliances are expected. If your home is on the lower side of the spectrum, you will not achieve a commensurate return on investment if you over spend on appliances.Generally speaking your updates should be in line with the value of the house.
Make sure the lawns and landscaping are well kept. The exterior of the house is clean and free from debris. Be sure to make sure the exterior does not have obvious defects or work that needs to be done. Curb appeal remains a primary factor in any rental property. From the moment they park and walk up to the front door, their first impression is already being made. If the outside of the home is not well kept, any improvements you made on the inside are quickly diminished.
WHERE NOT TO SPEND YOUR MONEY ?
1- FURNACE / AC
Believe it or not, it’s hardly a selling point to a tenant. Some will be energy conservationists that value such improvements, but most will be indifferent.
If your windows need to be replaced, by all means make this improvement. Upgrading to premium windows when sufficient windows exist is not recommended.
3- SPECIALTY EXTERIOR FEATURES
Some people build elaborate ponds, streams, fountains, landscaping and other exterior upgrades. More often than not a tenant is looking for a simple living experience and isn’t interested in an unnecessary upgrade.
4- SPECIALTY INTERIOR FEATURES
Pool tables, workout rooms, built-in bars and other specialty items will certainly be of importance to some individuals. However, not everyone shares the same interests. It’s often more valuable to offer flexibility for prospective tenants with open spaces for them to envision it as their own. For example, someone who doesn’t work out would find your workout room to be wasted space and probably not rent from you.
Whereas if it was an open room they could use the space as a workout room, office, kids play area, or other use that they personally find value in.When considering that the goal is to appeal to as many high end tenants as possible, be sure to make tasteful and neutral upgrades. Make enough improvements to showcase that the property is well kept. This will let the tenants know that you are not only a good landlord, but one they want to rent from.
Most niche properties will still eventually find a tenant, but be aware that cookie cutter houses in desirable areas often rent faster. You will be less likely to have to compromise on rent and terms if you have multiple interested parties.
5- THE BEAUTY CONTEST
Remember, finding the right tenant is to win the beauty contest. Spend your money wherethey can see it. Tenants on average will spend less than 15 minutes touring a home and make their decision. Bear in mind that most tenants do not focus on the mechanicals, but rather the way the home looks, the neighborhood , and the way they picture themselves using the space.
6- MOVE IN CONDITION REPORT
Rent Ready Condition as it relates to the Move In Condition Report may be the single most important document that you have if youever end up in court over damages to the property. The spirit of the move in condition report is to demonstrate the condition of the property at the time that the tenants take possession.
It is also used to establish expectations of having the property returned in the same condition. A move in condition report should include detailed photos of the property. These photos should be taken immediately prior to the tenant taking possession.
An excess of 100 photos of the property should be taken for even the smallest of properties. Photos should be taken of everything. The flooring, walls, and ceilings throughout should be well documented. Inside, outside, and tops of all appliances should be included as well. Special note should be taken to demonstrate the make and model of the appliances. This will protect you in the rare instance that an appliance you left the tenants with at move in is not the one that you find at move out. Photos should also be taken of the insides of closets, cabinets, sinks and bathtubs, and even toilets. The photos should demonstrate that the property is in immaculate condition throughout.
8- TENANTS AGREEMENT ON CONDITION
In the move in condition report the tenant is agreeing that the condition of the property is accurately depicted in the photographs and that they were taken just prior to the tenant’s possession. In the event that there is damage to the unit at the end of the lease, you now have the necessary documentation to withhold a security deposit or sue for more than the deposit. In most cases, if you can provide a tenant a photo of the “before” in perfect condition, “after” of it how they left it, and the bill from your handy person for the repair, they will not contest it. In the event that they do, you will have the necessary photo evidence to try it in court.
10- CONDITION AT LEASE END
Your second objective in the Move in Condition Report is to get the tenants to agree that they are responsible for bringing the property back to the condition in which it was delivered. Many states and cities will allow for “reasonable wear and tear” but it is my opinion that if you deliver an immaculate property that you should be allowed to ask that it be returned in the same condition.
11- RECEIPTS FOR CLEANING / CARPET
Your move in condition report and lease addendum should clearly spell out that this property was professionally cleaned and painted and that the tenants agree to return it in the same condition. Ambiguous terms like “normal wear and tear” leave an out for them and I would not recommend using the language. Tenants should also be allowed to provide additional photos or written evidence of the condition on their own as well. Let them know that anything that they wish to provide as evidence of the condition should be submitted via email or standard mail within 72 hours of their taking possession. We require this information be submitted via email for the purpose of a date stamp.