The final rental property system has to do with the turnover time between tenants. This could be as short as a couple of days (my favorite) or a month or two (not good). Here are the goals we have for our turnover system:
There are a couple of sub-processes within the turnover system.
Tenant Walk-Through Inspection & Return Security Deposit
This is an important and often contentious part of the landlord-tenant relationship. You need to walk through the property after a tenant moves out in order to determine if they have caused damage or failed to clean the property. If so, you will need to deduct money from their security deposit.
Some landlords are completely unfair and keep too much of the tenant’s security deposit. But some tenants treat the property poorly and cost the landlord a lot of money.
The key to this system actually begins with the lease signing and tenant move-in process in system #1. If you clearly explain your expectations and document the initial property condition, you can avoid a lot of problems later on. We also like to take a video before a tenant moves in so that we could show them evidence of before and after.
I used to spend a lot of time walking through properties and making punch lists for our contractors to fix before the next tenant moved in. Then it dawned on me that I was doing extra work!
Spend a lot of time on the front end creating detailed expectations for your contractors (instructions are helpful too). They can then print off this checklist and use it as a guide. Sometimes there are repairs needed that aren’t on the checklist, and either the contractor or the property manager will catch these while the other work is being done.
One important part of this system is your choice of paint (yes paint!). I recommend using a standard paint color and brand for all of your units. We actually found that the less expensive, Sherwin-Williams contractor paint touched up the best. Because we use one paint color for walls and another for trim, we can buy in bulk and use up every drop of a can. We can also touch-up or just paint one wall instead of painting an entire room. This is a big savings!
Chad Carson is a member of Metrolina REIA (metrolinareia.org), which provides education, networking, and networking for real estate investing in the Charlotte region. Chad also writes about real estate, money, and life at coachcarson.com.