Did you recently inherit a home or want to enter the investment property industry? The rental property market is an excellent segment for first-time and seasoned real estate investors alike. It produces high returns quickly and consistently, allowing investors to diversify their portfolios with single-family homes, vacation rentals, commercial buildings, and other property types.
Scaling a lucrative investment property portfolio means investing in the right resources for success, namely, property management. An essential cornerstone of this management model is property maintenance. A property maintenance company understands how maintenance is fundamental to the tenant experience and maximizing profits.
There are more than 19 million rental properties in the U.S., signaling that now is the time to consider the possibilities of investing. Property management services minimize operating costs in several ways, which is important for maximizing profitability. The guide below explains the various services and benefits of rental property maintenance.
Rental Property Inspection
Excellent property maintenance protocol starts with a thorough inspection. Property managers are trained in identifying potential repair issues, areas for upgrading and keeping properties up to code. These practices ensure properties are safe, welcoming environments for tenants.
Following rental inspection checklists ensure higher property values. Well-maintained properties attract more tenants and income which boosts property values. The property values of surrounding homes and buildings also add to that value.
Maintained properties have lower tenant turnover rates which is also fundamental to higher property values. Prospective rental property buyers also look at these rates when considering properties for their own investment portfolios. Investing in a property with high tenant turnover rates is a risky decision.
What Is Included In a Rental Inspection Checklist?
Property managers have lengthy inspection checklists that include safety features like fire extinguishers and smoke alarms. Building materials, electrical systems, and appliances are also checked for safety and replaced if necessary. HVAC systems (including furnaces) are checked for gas leaks.
Building materials are inspected to ensure there are no toxins like asbestos. Any building materials are replaced as necessary to ensure safety like water-damaged wall treatments and insulation. Windows are inspected, repaired, and replaced to prevent HVAC heat and cooling loss.
All properties are inspected for pest control. Measures include installing necessary upgrades to prevent pest infestations.
Upgrades may include installing new siding to close up any gaps where pests could enter, keeping roof gutters clean, sealing windows to prevent bug infestations, and repairing roof damage to stop critters from entering the unit.
The property’s entire power system is inspected for potential issues and upgrades. Electrical wiring is replaced and upgraded as needed. HVAC systems require their own electrical wiring systems; property managers work with local electricians and HVAC techs to ensure these systems are safe, functional, and energy-efficient.
The unit’s plumbing system is thoroughly inspected for drain clogs, old pipes, loose fixtures, and other potential problems that could lead to flooding. Property managers understand when plumbing pipes and parts are reaching the end of their lifespan, replacing them before potential issues arise. Like local electricians and HVAC techs, property managers also network with the area’s best plumbers to ensure these systems are safe and working properly.
Property managers book indoor air quality tests to ensure there are no air pollutants before tenants move into the property. These tests are typically conducted by HVAC companies. An inspection may reveal that a new HVAC system is required or new air filters are needed.
Kitchen and Bathroom Repairs and Upgrades
The quality of the kitchen and bathroom are two important components prospective tenants look for when searching for rental properties. These areas also generate more maintenance requests so it’s important to keep them in top shape.
Rental inspections ensure all bathroom fixtures are positioned firmly in place. Loose bathtubs, toilets, and sinks are quickly repaired or replaced. Leaky faucets are quickly identified and replaced to prevent water loss.
Shower heads are inspected for loose fittings and will be replaced as needed. Bathtub faucets and hot and cold water adjusters are also inspected for quality. Tile grout is meticulously cleaned and tile flooring is inspected to ensure there are no cracks, loose tiles, or other potential hazards.
Some bathrooms may have senior safety upgrades like large bathtubs with seating. If seniors are the target tenant demographic, a property manager will ensure that safety upgrades are present in the home like bathroom railings.
Bathroom lighting is also replaced and upgraded as needed to ensure tenants have plenty of light to work with. Medicine cabinets are checked for loose hinges and potential replacements.
Kitchens are thoroughly inspected for safety, including smoke alarms and fire extinguishers. Ovens are inspected and cleaned to ensure health safety while the kitchen’s plumbing system is checked for efficiency, including the garbage disposal. Large kitchen appliances like refrigerators and dishwashers are inspected for functionality.
Kitchen flooring is checked for quality and may be replaced if the materials show too much wear and tear. Cabinets and pantry spaces are inspected, cleaned, and repaired. Any loose shelving is quickly identified and repaired.
Other Interior Inspection Items to Know
The rest of the interior property is also inspected for quality and safety, including bedrooms and living rooms. Ceilings and floors are checked for water damage, past warping, and general wear and tear. Wall treatments may be replaced with new paint jobs.
The attic space is checked for insulation; this prevents HVAC heating and cooling loss during frigid winters and sweltering summers. Basements are also checked for safety and flood prevention.
Exterior Property Maintenance
The next action item on a property maintenance company’s checklist is exterior maintenance.
Items include:
- Lawn and grounds maintenance
- Exterior lighting (i.e., porch lighting)
- Garage maintenance
- Exterior wall treatments (painting, stucco, etc.)
- Roofing (shingle repair, etc.)
- Driveway paving
- Exterior HVAC units
- Fencing and gates
The above items are important for maintaining curb appeal. Curb appeal helps maintain the property value of the home and also attracts prospective tenants when the property is on the rental market. A property manager may also hire a landscaper to plant additional plants to enhance curb appeal for marketing purposes.
A property management company may hire a lawn care company for routine mowing and gardening. Dead trees are also identified and removed to prevent potential damage to roofing, windows, and cars. Fences are painted and repaired as needed, and security gates are inspected for safety, as well.
Exterior lighting is extremely important for tenant safety. Property managers ensure these lights are bright and functioning properly. Front doors, porches, driveways, and garages should all feature exterior lighting; lawns may also be illuminated with LED and solar-powered lights.
Exterior HVAC units are covered and cleaned to prevent debris and critters from entering the unit. Additional roofing inspections may also be necessary before storms to prevent potential water damage. Property managers pay attention to these details to prevent costs from preventable repairs and replacements.
A professional property maintenance strategy also includes a tenant maintenance request system. Property managers are readily available for maintenance requests, from plumbing issues to HVAC heater troubles. Property managers contact the right vendor for the job and ensure these issues are handled immediately.
Rent Collection
Next on a property manager’s checklist are administrative duties like rent collection. Rental property investors rely on consistent rent payments from tenants. The best property management companies collect rent on time, creating less hassle for the owner and tenant; this may include accepting online rent payments or multiple forms of payment.
For example, Reedy and Company allows tenants to pay rent online through the company website. Tenants don’t have to go through the trouble of mailing checks or visiting an off-site office. This process also ensures investors get their money quicker.
Tenant Marketing and Screening
A strict tenant screening process ensures that only the most responsible tenants are cleared to move in. This approach prevents issues with late rent payments, non-payment, and lease agreement breaking.
This process starts with a marketing strategy that speaks to responsible tenants only. Rental property listings describe the monthly rent price, tenant rules, and eligibility requirements. Clearly stating these details ensures only tenants who meet eligibility requirements apply.
Property managers also attract top prospective tenants with excellent property maintenance standards. These standards result in high-quality listing photos, video tours, and walkthroughs. It’s important that a property adequately reflects the rental listing price.
Top candidates are further screened for approval.
This process typically includes:
- Verifying identification (driver’s license, state ID, etc.)
- Current and past employment
- Paystubs and bank statements
- Past rental history (previous addresses)
- Rent payment history
- Application references (previous roommates and landlords)
- Criminal background check
- Eviction database check
- Contact information
Property managers use only the most reliable tools to verify accurate data. They may also call references to verify past rental history, behavior, and rent payments. Managers also check verified databases for accurate data on criminal history, past addresses, and employment.
Reducing Rental Maintenance Costs
Remaining diligent about the above responsibilities helps manage operating costs, resulting in higher profits for investors. Even owning one property alone can generate a considerable amount of expenses. Investing in a property management company ensures no detail slips through the cracks, whether it’s a leaky roof or a tenant with poor rental history.
Now is an excellent time to review rental property metrics to see how a property manager can truly save you money.
One of the most important metrics is your return on investment, also known as ROI. For example, investors can expect a good ROI percentage for a property management company that maintains plumbing compared to the repair costs of keeping old pipes.
Tenant turnover is another one. Property managers can gauge the long-term potential of a tenant through in-person interviews and past rental history checks. Ideally, you want tenants to remain in the property for at least three years to maintain a low tenant turnover rate; this means the tenant renewed their lease at least three times.
The above point speaks to the importance of having a good lease renewal strategy in place, a hallmark of a good property manager. Tenants should be informed of lease renewals well in advance. Depending on the situation, lease renewal negotiations may be considered to maintain low turnover rates.
Excellent property upkeep is crucial for generating more lease renewals, as well as strong communication and quick response to maintenance requests. Property managers may also ask tenants for feedback to get a clearer picture of their experience; this is important for maximizing profitability.
Working With a Property Maintenance Company
Successful rental property investors hire property management companies at the beginning of their investing journey. This process can start with an initial consultation to learn more about the market and the possibilities of investment properties. It’s a great way to discover the realities (and expenses) involved in investment properties, as well.
It’s important to understand what goes into a profitable rental property. Maintainance is just one aspect. There’s also location, amenities, proximity to transportation and shopping, and local industries.
Proximity to school districts, colleges, and company headquarters is also a big draw to certain tenant demographics. Understanding these factors can help guide rental property purchases with the highest profit potential. Property management companies like Reedy and Company also provide portfolio management services, accounting, and private financing to help investors grow and manage successful rental property portfolios.
Enjoy Higher Profits With Professional Services
Consider cost reduction from the start and invest in a detail-oriented property maintenance company. Review the above guide when choosing the right services for your investment property goals. Put property maintenance at the top of your list to ensure low turnover rates, excellent tenant experiences, and more lease renewals.
Reedy and Company was founded over two decades ago by a team of property management professionals with over 40 years of industry experience. We manage more than 3,500 properties in the Memphis area, including single-family and multi-family units. Our team comprises property managers, accountants, leasing specialists, technicians, and more.
We’re also proud members of Greater Nashville Realtors, Tennessee Realtors, Memphis Investors Group, Memphis Area Association of Realtors, and more professional organizations.
Contact us today to discuss your goals at length.
