Attention to Detail Can Boost Your NOI
MULTIfamily property owners know that there’s no such thing as “plug and play.” A critical component in optimizing your Net Operating Income (NOI) is the discipline you apply to routinely paying attention to your property.
NOI is your income after paying the expenses related to your property. It is the golden rule by which successful MULTIfamily property owners measure success. A lot goes into boosting NOI.
Read on to learn about two often overlooked fundamentals.
The importance of routine check-ups
Your preventative maintenance routine should include three inspections: move-in, periodic – inside and out, and move-out.
These inspections keep you abreast of the conditions and activities related to your MULTIfamily investment property. Read more about inspections associated with an effective preventative maintenance program here.
What are the two most important inspections?
It’s important to conduct all three types of inspections, but these two can have the greatest impact on your property and your relationship with your tenants:
- The move-in inspection, which ensures that your tenant is pleased with their new home.
- The move-out inspection, which ensures that you and your tenant separate on good terms.
What are the benefits of a move-in inspection?
The quality of your move-in inspections can pay great dividends downstream. The goals of your move-in inspections are:
- To guarantee that your tenant moves into a clean, functioning, and pleasant-smelling residence that reinforces their decision to have signed a lease with you.
- To establish your expectations regarding the appearance and functionality of the property when your tenant leaves.
Eight steps to a good move-in inspection
A good move-in inspection involves more than taking a quick look-see at the property. Here are the eight things you must check out to be thorough:
- Double-check that everything that you identified on your move-out inspection punch list was satisfactorily addressed.
- Are the floors clean?
- Are the countertops and window sills clean and dusted?
- Are the appliances clean and in good working condition?
- Are the lights and fans working?
- Are all the keys available? (Doors, storage areas, alarm systems, etc.)
- Is the garage door remote in good working order? (If applicable.)
- Is the landscaping in good condition? (If applicable.)
What are the benefits of a move-out inspection?
As important as the move-in inspection is, it is trumped by the move-out inspection. This is when your attention to detail and diligence are essential. Here are two reasons why the move-out inspection is so important:
- This inspection determines the extent of your departing tenant’s monetary responsibility per the terms of their lease. Before returning the security deposit, you are wise to take advantage of this last opportunity to ensure that your tenant doesn’t leave you holding the bag for expensive repairs or clean-up that will erode your return on investment.
- The move-out inspection identifies the steps needed to make your property marketable and put it back in play for the next tenant, by creating a punch list to guide you or your contractors.
Ten steps to a good move-out inspection
A move-out inspection is more involved because of its importance. Here are the things you want to pay attention to:
- Is the property clean?
- Did the tenant leave any individual property behind?
- Are the walls in undamaged shape? Look for holes, dents, anchors, hooks, scuffs, marks, mounts, nails, and adhesives.
- Is there any damage to the appliances or plumbing? Is everything in good working order?
- Do the lights work?
- Are any latches or pieces of glass broken in the windows?
- Are the screens there, and in good working order?
- Are the smoke detectors there, working, and do they contain good batteries?
- Are the air conditioner filters clean?
- Is the landscaping in acceptable condition? (If applicable.)
As a property owner, you must fix everything prior to welcoming your next rent-paying tenant.
Three actions that guarantee excellent move-in and move-out inspections
You want to be efficient, detailed, and diligent when it comes to conducting move-in and move-out inspections of your MULTIfamily property. Here are three disciplines that will help you succeed:
- Create a punch list to guide whoever is conducting the inspection and doing any required follow-up work.
- Take photographs and narrate a video to jog your memory and create indisputable evidence that will resolve disagreements.
- Maintain a file that contains your punch list, photos, videos, and the receipts for any expenses you incur.
Why a property management company is the best option for quality inspections
You can attempt to wrestle with all the intricacies of conducting and recording inspections on your own. You can line up people to deliver necessary remedies on your own, too.
MULTIfamily property owners increasingly choose to partner with an experienced property management company for these five good reasons:
- Objectivity. Property management companies are proficient at making sound, rational judgements that have your best interests in mind.
- Professionalism. The value of your property will benefit from excellent tenant relationships and a quality maintenance and inspection routine.
- Resources. When you require action to remedy any problem discovered during an inspection of your MULTIfamily property, your property management company has a list of available, vetted, licensed, insured contacts at its fingertips.
- Time. A good move-in inspection takes about thirty minutes. A move-out inspection can run more than two hours. And this is before any follow-up activity, like removing left-behind possessions, making repairs, or patching and painting.
- Confidence. It’s reassuring to know that your property is well cared for and that the details will be managed on your behalf.
Summary
Move-in and Move-out inspections are important practices that affect the condition and value of your MULTIfamily property and influence the quality of your tenant relations.
There is a step-by-step discipline to conducting and recording move-in and move-out inspections.
The most efficient way for property owners to ensure that these essential inspections are completed in an objective, professional, and timely manner is to team with an experienced property management company.
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