Painless Property Management: Maintenance and Pets

Editors Note: This is the second installment of a two-part series. Learn more about Painless Property Management in the first part of this series.

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Property management can be tricky; even the best investors know that. But with the right inspections and policies, you’ll sidestep the worst mistakes without blinking an eye. Choose a property manager that follows these general guidelines, so when every owner’s nightmare—maintenance problems and pet damage—comes knocking, you’ll be prepared to face it.

Maintenance

Sad to say, maintenance issues can’t be avoided, but there’s good news: it gives property managers a chance to build client and tenant trust. When solved immediately and correctly, maintenance keeps the tenants happy, and it saves you money down the line. Here are the three kinds of maintenance you need to know more about:

  1. Necessary Maintenance: the work that needs done ASAP. This includes anything that creates unsafe or unmanageable living conditions for the tenant, such as broken pipes, roofs, or heaters.
  2. Deferred Maintenance: less important work that should be completed by the end of the year. It certainly needs to be completed—for the sake of the owner and tenant’s sanity—but it’s lower on the priority list than necessary maintenance.
  3. Tenant-Caused Damage: issues the investor shouldn’t pay for. The property manager collects money from the tenant as soon as possible, whether that’s in the next month’s rent or from a security deposit.

You should expect to put 5% of each months rent toward maintenance. If you’re renting a home that’s $1,000 a month, for example, $50 dollars goes into an account reserved for maintenance. Don’t worry, though: that’s not part of the owner’s cash flow. It is included as a normal expense. If you use a turnkey provider, they’ll include the maintenance and vacancy reserve withholdings in their expense reports.

What to watch for

The best property managers give you as much detail as possible. They don’t just tell you that something needs to be fixed; they show you pictures and explain the process, cost, and cause.

Find a property management company that does regular inspections. Ensure they make note of tenant damage immediately so that it can be dealt with in a timely manner instead of at the end of the lease. This will force the tenant to take ownership for any damage they cause, and it will help you see any red flags in specific homes.

The best property management companies often offer or recommend a gap insurance product. Gap insurance is meant to protect the owner when a tenant has a less desirable rental or credit history. The tenant pays the monthly premium for the coverage as part of their contracted fees. Then if damage is caused or rent is missed, the gap insurance can help the owner stay even with the cost of operating and maintaining a property.

What you can do

Make the process easier by having the needed information for each property in one place. Provide a full rehab scope for each property so the property manager knows what was done previously on a property. You’ll also want to provide warranty information. For example, if the roof was just redone a few years ago, there’s a good chance they can use the warranty for repairs instead of spending your money.

You should also require renter’s insurance. It comes out of the tenant’s pocket, not yours, and you’ll suffer fewer headaches when issues do arise.

Pets

It might be easy put up “No pets allowed” signs, but that policy could be hurting your vacancy rates. After all, up to 70% of potential tenants have a pet. So how do you protect your homes without missing out on great leasing opportunities?

Well, you should know your options. The most common is a pet fee, which is a flat rate that the tenants pay monthly and it is nonrefundable. It’s a simple option and often effective.

However, we suggest a different choice: refundable pet deposits. When tenants are charged with deposits instead of fees, they’re less likely to cause damage because they hope to get their money back.

You can, additionally, add a monthly pet rent. Pet owners will do anything for their animals, and that means paying extra fees rather than leaving Fido behind. Just know that these can’t always be applied to emotional support animals and disability animals.

Finally, you may want to require additional inspections when tenants have pets. Again, the cost of these extra inspections can be charges to the tenant as well. So, instead of having 2 inspections per year, you might have 4 per year with two being paid for by the tenant. (The first two, by the way are also paid by the tenant through the monthly property management fees.)

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