222 Week 4 F /For WIZARD KIM

Chapter 5

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G E T T H E S C O O P O N … Improving your property appeal ■ Safety and

security ■ Building a to-do list ■ Securing your vacant property ■ Conditioning and preparing the exterior and interior of your rental unit ■

How to work with a limited budget ■ Developing curb appeal ■ Creating a quality property

for a quality tenant

Preparing Your Property for Tenants

W hen you rent your property, you want it to look clean and pristine to attract someone who will care about your rental. If your

property is in excellent condition, you will attract an excellent tenant. As you’re preparing the property for rent, prepare it as if you were moving in. Think about your first rental and the little things that made a difference to you. You also need to keep décor neutral. And don’t over-improve your rental prop- erty. It is a fine balance between doing too much and doing too little that you must develop and that comes over time.

Where to begin It is hard to know where to begin when you acquire a property or when your tenants have just moved out. If your tenants have just moved out, you need to begin with your move-out inspection to determine

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76 PA R T I I I ■ U P G R A D I N G A N D M A I N TA I N I N G YO U R I N V E S T M E N T

what damage, if any, the tenant has caused. You can find out more about that process in Chapter 10 and find a sample in Appendix 4.

After you have conducted your move-out inspection in writ- ing and taken photos if necessary, begin getting your property in clean and pristine condition to market and attract your next great tenant.

Purchasing lockboxes for your properties A lockbox is a box that sits on your front door or nearby that you can keep keys in. You open the lockbox with a code, usually a number code enabling you to send your contractors or clean- ing company to the property without having to be there each time. The lockboxes make things quite convenient. Sometimes, landlords also give out the lockbox code to a prospective tenant to view vacant property. In addition, each time you go to the property you don’t have to remember to bring keys. Changing the code on a lockbox is very easy. You can change it as often as you like and for each of your units or each turnover.

Bright Idea

It is always a good idea to take pictures of the property right after your ten- ants have moved out. If there is ever a dispute, a judge will ask for photos to prove the condition or damage and justify the charges to your tenant’s security deposit.

Watch Out!

Make sure the tenants have turned in the keys and are completely out before you begin removing their belongings. A tenant is considered “out” when he or she returns the keys. Have something in your rental agreement that requires the tenants to return the keys to you or telephone you to confirm the tenant is completely out.

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77C H A P T E R 5 ■ P R E PA R I N G YO U R P R O P E R T Y F O R T E N A N TS

Many times, with your first rental property, you as the land- lord are the one doing the turnover work and getting the prop- erty ready. Be prepared.

Painting, cleaning, and replacing flooring I suggest painting the interior of the property first. Tape off the doors and windows in preparation. After you paint the property, everything begins to look better. A fresh coat of paint can make all the difference in the overall appearance of the property. Or if you hire a professional painting company to paint the inside, you can be working on other parts of the property at the same time.

Remove any debris or junk that your previous tenants left in or around the property. Get out the list you made when you walked through the property prior to the tenant’s moving out. Use the list to pick up everything you need at the hardware store, and you’ll prevent multiple trips. Keep your list handy so that you can work from it and so that you don’t forget something in preparing the property.

Hire a gardener (or take the time yourself) to clean up the outside, check your gutters, and do a cleanup of the appearance.

After the painting is done it is time to replace the floor cov- erings, if that is in your plan. This is something that should be prearranged, as you need to have the carpet picked out, ordered, and the installation date set up in advance.

If you have an area near the front door where you can put linoleum instead of carpet, it is usually a great idea. This way anyone walking in the front door, particularly in the winter, will not be walking right on to your brand-new carpet.

Moneysaver

By choosing a high-quality carpet, you can assure that your carpet will last longer. Make sure to put a good-quality pad underneath the carpet. And never go with light colors. I choose a carpet color that I refer to as “coffee with cream.” It is neutral but doesn’t show stains.

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78 PA R T I I I ■ U P G R A D I N G A N D M A I N TA I N I N G YO U R I N V E S T M E N T

Take a good look at your window coverings. Most rental properties now have gone to blinds instead of drapes. Now there is a lot of competition out there, so be sure to shop for your blinds. I recommend faux wood or metal for all rooms except the bathroom — if you put blinds in the bathroom, use vinyl because of the constant presence of moisture. You can go to many home-improvement stores and have them cut blinds to fit while you wait.

I also highly recommend that you hire a professional clean- ing company to come in and do a major cleaning. This includes window washing, inside and out. Having the property profes- sionally cleaned eliminates arguments at the time of move out about whether or not the property was clean when the tenant moved in.

If you deliver a property to a tenant that’s sparkling clean and in good working order, it will make life as a landlord so much easier. In addition, if you do happen to have a problem when your tenants move out, you can provide your written move- in inspection, photos showing the condition, and receipts show- ing all the work you had done prior to their moving in.

In all my years in property management, the largest prob- lems that I see are in older properties that have not been cared for and maintained. During a turnover, in between tenants, is the best time to take care of maintenance.

When you read Chapter 6, you find things to do to keep up normal maintenance and how to hire your contractors.

Moneysaver

You can conserve a bit of energy by turning off the furnace, water heater, and air conditioning while the property is vacant. Generally, you do leave the power on, however, so you that you have lights available to show the prop- erty, plus water to do repairs, painting, and cleaning.

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79C H A P T E R 5 ■ P R E PA R I N G YO U R P R O P E R T Y F O R T E N A N TS

Making a maintenance to-do list for yourself The first thing I recommend is to walk through your new rental property and make a list of all the maintenance you would like to do. Your list should include:

■ Exterior appeal

■ Interior appeal

■ Repairs

■ Safety items

■ Security concerns

■ Upgrades

■ Preventative maintenance

Begin from the minute you drive up to the property. The term “curb appeal” has been used for years to describe that first impression. You don’t want to spend your time meeting prospective tenants at the property, and then see them gawk at the front and drive away. Give it a “Wow!” factor that will bring them into your property to see the entire package.

You want to pay special attention to property safety and lia- bility hazards. You should survey your property, looking at any existing and potential hazards that could cause or contribute to a person being hurt on your rental property.

You need to look at:

■ Child endangerment

■ Trips and falls

■ Fire safety

Bright Idea

Go to the front of the property and take a good look at what you see when you first arrive. A poor first impression of the exterior of your rental property is hard to reverse, regardless of how great the inside looks.

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80 PA R T I I I ■ U P G R A D I N G A N D M A I N TA I N I N G YO U R I N V E S T M E N T

■ Burglary

■ Building code and violations

You can have a check-off list or use the list in the following sections to review your rental property needs. For more on main- tenance and repair, check out Chapter 6.

The exterior A tenant’s first impression starts the moment he or she drives up to (or even drives by) the property. You want to attract that quality tenant by taking care of the exterior and giving the impression that your rental property is well maintained.

■ Walkways/pathways should be clear. It should be easy to get to and from the house’s walkways/pathways as you enter the property.

■ Any crack in the walkway or driveway that has lifted the paving higher than 1⁄2" is considered a trip hazard. Hint: Drag your toe against the crack — if it gets snagged, it’s probably a trip hazard.

■ Make sure shrubs or bushes don’t block the entrance or the windows. If bushes grow above the level of the window sill, it allows a burglar to have cover while breaking the window and gaining access.

■ Walk the yard to ensure there are no hidden holes.

■ If you have any pipes sticking up from old sprinkler sys- tems or other items, cut them off at ground level or box them in to prevent tripping.

Watch Out!

You aren’t responsible only if your tenants slip and fall but also if one of their friends or guests is injured on your property. If someone is injured, I guaran- tee he or she will be looking to you to take care of medical bills, loss of work, and so on.

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81C H A P T E R 5 ■ P R E PA R I N G YO U R P R O P E R T Y F O R T E N A N TS

■ Walk the fences if you have them. You don’t want a fence blowing or falling over and hitting someone or damaging the tenant’s belongings. You are also open to liability if a dog gets through a hole in the fence that you are aware of and have not repaired.

■ Look up. Are your gutters leaking onto the sidewalk or steps, making it slippery when the weather conditions are poor?

■ Make sure the gutters and downspouts are securely attached so they will not fall in high winds.

■ Check the roof. If the roof looks old, have a professional roofing company provide an evaluation.

■ If there is a chimney, be sure there is a spark arrestor on the top and there are no cracks in the grouting that could lead to a fire inside the frame. The best thing to do is have a fireplace inspection by a qualified person. If the fire- place is unsafe, block it off or repair it.

■ Do you provide adequate lighting as you enter the property and around the perimeters? You want to avoid someone tripping and falling on your property due to poor lighting.

■ Have your decks and rails been checked for safety and sup- port? Does your deck have a handrail if there are three or more steps?

■ If you have a front door screen, make sure it is clean, hung properly, and in good condition. An automatic closer will help keep the door from hitting the person when they have an armload of groceries.

Watch Out!

Always change all locks between tenants. This is a very inexpensive insurance policy. Also, if you have just purchased the property or a former tenant just moved out, make changing the locks your number-one priority and make no exceptions.

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82 PA R T I I I ■ U P G R A D I N G A N D M A I N TA I N I N G YO U R I N V E S T M E N T

■ Change all locks.

■ Make sure you have deadbolt locks on all doors that lead to the inside. Note: Double-key deadbolts are against the law in some states. These are locks that have to have a key to open them from both the inside and the outside of the property. The problem is that during a fire, the person on the inside doesn’t have time to find a key and put it in the lock in order to get the door open. Some people will say they leave a key in the lock all the time, but do you want to chance the one time that a key has dropped out or been taken out? Check your state and local laws concern- ing all deadbolt and locking mechanisms.

■ Check the knobs to ensure they work correctly and that the door latches when it is closed.

■ Think about installing peepholes in the front door. This is easy and not costly to do, and it gives your tenant a sense of security.

■ If there is a doorbell, make sure it works.

■ If you have an automatic garage door and an opener, have it safety-inspected by a professional who will check the door cable and the mechanism ensuring that the door operates properly. Also have this person check the actual garage door opener. Reprogram the control if your former tenant did not return the garage door opener.

The interior Sure, you need to have the exterior looking good to attract the quality tenant to rent your property, but don’t stop there. When you put the property on the market, be sure it looks great both inside and out.

■ Smoke detectors, fire extinguishers, and carbon monoxide detectors are required in some states and recommended in others.

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83C H A P T E R 5 ■ P R E PA R I N G YO U R P R O P E R T Y F O R T E N A N TS

■ If you have stairs, check the banisters and railings to be sure they are secure.

■ Check the carpet for tears or rolls. These are trip hazards. Replace or stretch the carpet to repair. If you have stairs, be sure the carpet is attached.

■ Look up again! Make sure those light covers are secure and replace any that are chipped around the holders. Also look for plastic light covers that have been misshapen by the heat of light bulbs. They are probably the wrong kind of bulbs for that fixture.

■ While you are looking up, look to see if you see any obvi- ous water stains on the ceiling.

■ Open and close all drapes, blinds, shades, and so on to make sure they are solidly attached to the wall and operate properly.

■ Remove any broken glass. Broken mirrors may look solid, but they could also fall at the worst time.

■ Check the outlet covers. If you see a dark stain rising from the plug on the cover, it probably means there has been a short. Have an electrician check the outlets and repair them, if necessary.

■ Replace light switch plates and receptacle covers.

■ If you have a fireplace, have it safety-inspected and cleaned at least once every other year.

■ Make sure all exterior doors lock and all windows open and lock.

“ Work on training youreyes to look at each area of your property from the standpoint of ‘Could this injure someone?’ or ‘Could this cause a fire?’ or ‘Does this make it easier for someone to break in?’ ”—Sylvia H., investor and

property manager

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84 PA R T I I I ■ U P G R A D I N G A N D M A I N TA I N I N G YO U R I N V E S T M E N T

■ Make sure you have screens on the windows. The screens should be clean, unbroken, and secure, especially on the second floor.

■ Look at the heat registers to see whether dark stains are above the register. This is probably soot or dust particles carried through the system and forced out through the register. Have the furnace or heating element checked. Changing the filters on the system will keep the furnace operating effectively and efficiently. You want to prevent a fire caused by faulty operation.

■ Make sure the water heater is strapped properly and has gas flex lines, especially if you are in an area with earth- quakes. Check the water temperature to make sure it is below your local area’s recommendation. There are anti- scalding devices available that turn off the water at the shower head when it reaches 110°F.

■ Look at the washing machine. Replace the rubber hoses for both the hot and cold water on your washing machine. They should be replaced with steel braid hoses.

In the kitchen Some say the kitchen is one of the most important rooms in the home — well, the kitchen and the bathrooms — so make your kitchen clean and be sure it looks great.

■ Check all faucets to be sure they aren’t leaking and there is good water pressure.

■ If your faucets are very old, replace them now so you won’t have to replace them in an emergency situation, like on a Sunday.

■ Check all your water supply lines and pipes under the sinks in the kitchen and bathrooms.

■ Run your dishwasher through a complete cycle.

■ Be sure the garbage disposal has the rubber cover in good shape to keep items from being thrown out of the

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85C H A P T E R 5 ■ P R E PA R I N G YO U R P R O P E R T Y F O R T E N A N TS

disposer when it is running. Turn the disposal on to make sure it is working.

■ Check the stove vent to make sure it is working and draw- ing out the smoke.

■ Make sure you have the required GFI (ground-fault inter- rupt) outlets near the sink.

■ Turn on the burners for the stove and turn on the oven to make sure they are all in working condition.

■ Make sure your appliances are all properly installed and there is no problem with the hookup or gas line.

In the bathroom The bathroom(s) are an important part of your rental. Take the extra step to be sure the bathroom is clean and safe.

■ Replace the old toilets with new, low-flow toilets.

■ Make sure your toilets aren’t continuously running and that the toilet seat is not old and dirty looking. Put your hands on each side of the toilet tank and gently shake back and forth. You may be surprised how often you can prevent a leak around the base by simply tightening the bolts. Check the towel racks and toilet paper rack. Go ahead and put a new roll of toilet paper in each bathroom.

■ Be sure there is a plug for each drain and that the faucets are marked for hot and cold, and that the hot water doesn’t come out of the cold faucet!

■ Caulk the bathtub. You need to remove old, mildewed caulking and replace it with clean, white caulk.

Moneysaver

When replacing an older toilet with a new, low flow toilet, keep in mind many local water districts have a rebate program. In addition, you will be saving money on your monthly water bill.

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■ Be sure the glass shower door is made of tempered glass. The older ones were not and can easily break if tenants fall against them.

■ Ground fault interrupts (GFI) switches are a safety issue. You must have GFI outlets whenever the outlets are near water. See your local building code for the details, or call a licensed electrician as they know the codes.

■ Check lighting fixtures, which are very inexpensive and can be replaced quite easily. Hint: Provide a package of 40- watt bulbs. Most people think 70-watt is better, but these burn too hot for many light fixtures.

■ Make sure the mirror doesn’t have cracks in it or rust around the edge. This is something your tenants must look at each day.

■ Make sure the medicine cabinet is not rusty inside. You might be surprised at how little a new cabinet costs.

Just the facts ■ Clean and pristine properties attract great tenants.

■ You will attract a quality tenant if you take care of the front appearance of your property (curb appeal).

■ Safety and security items on your list should always come first.

■ The time to take care of your property’s preventative maintenance is between tenants.

Watch Out!

The prospect’s first impression begins when he or she drives by the property. If it hasn’t been maintained from the outside, prospects won’t bother to call for an appointment to see the inside. You can have new carpets, paint, and appliances, but if the outside isn’t maintained, it won’t make a difference.

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■ Watch for trip hazards both inside and out.

■ Keep good records (including photos) of what you have replaced or repaired.

■ Plan for the failures; success takes care of itself.

■ If you have the choice to repair or replace and have the ability and money to replace, always replace.

■ Spend the money to take care of your properties, as this is one of the largest and best investments you have.

■ Use lockboxes for easy assess on vacant properties.

■ Provide your tenants with a safe and clean property. They will stay longer and be happier, treating your property like their home.

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