Routine property inspections help keep rentals profitable

Routine property inspections help keep rentals profitable

Posted on Thursday, May 31 2012 at 12:50 PM

Property inspections should be routinely undertaken throughout the lease to maintain a profitable and protected property, according to landlord specialist Terri Scheer Insurance.

“Firstly, it’s important to
ensure you’re familiar with legislation relating to conducting property
inspections in your state,” said Carolyn Majda of Terri Scheer Insurance.

The first inspection should be
undertaken when the tenant enters the property and should be completed by the
tenant and the landlord/property manager, said Majda. “Use the form to accurately record the condition of the premises,
documenting any wear and tear, cleanliness and the working order of fixtures
and any household items you have left for the tenant to use.”

Majda said the more detailed
the reports are, the better, “so take as many photos and videos of the property
as you can”.

“Your tenant should then be
given a copy of the report for them to review and sign accordingly if they
agree with its contents,” she said.

Handing a welcome pack to the
tenant before he or she moves in, containing the lease agreement, a copy of the
entry condition report that has been completed by the landlord/property manager
and information about follow-up inspections throughout the tenancy is a good
way to set tenants off on the right foot, said Majda.

Following the initial
inspection, a routine inspection should be done every three to four months,
Majda said. “Ongoing inspections can make it easy for landlords to quickly identify
if and when any damage to the property has occurred and if there are any
maintenance issues that may need attention.”

Tenants must be given seven to
14 days notice before the inspection; landlords/property managers must also
advise the tenant that he or she isn’t required to be present for the
inspection, however if any maintenance is required to leave a list of specifics
at a convenient place in the house – often on the kitchen bench.

“Plan to conduct the inspection
in between the hours of 8am and 7pm, and take a copy of the tenancy agreement
with you so you can refer to it if any repair or maintenance issues arise,”
said Majda.

“When inspecting the property,
ensure the property is clean and that there aren’t excessive amounts of rubbish
stored within its perimeters.

“Take photos and video footage
of any malicious or accidental damage you notice at the property, as
comprehensive evidence may be required if you make an insurance claim.

“Injury or loss resulting from a
safety hazard that hasn’t been attended to may give rise to a costly legal
liability by the tenant, so check that all smoke alarms and security locks are
in working order and that gardens are safe to reduce the risk of harm.

“In some states, certain
appliances such as air conditioners and water saving devices are mandatory for
rental properties, so make sure you also monitor them during inspections so
they can be repaired before any penalties are imposed.

“The inspection should then be
documented in a report, and a copy should be given to a tenant.”

When the lease ends, there
should be one final check on tenant departure, Majda said. “If all the
conditions of the tenancy agreement have been met by the tenant and the
property was left in good order, the bond should then be returned to the tenant.

“Outgoing condition reports with
supporting photos and videos can be used as evidence if there are any
outstanding issues at the end of the lease and you decide to retain the full or
part of the bond.”

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