Part of being a successful landlord is implementing safeguards and protocols that protect your financial investment and prevent unforeseen circumstances from eating away at your profits. And one of the primary ways Houston landlords do this is by conducting move out inspections. But in order for a move out inspection to be effective, it needs to be thorough. Do you know how to make it worth your time?
Move out inspections are considered a good practice – regardless of the price point, location, or type of tenant you have in the property.
According to investor Erin Eberln,“A move out inspection occurs when a landlord and a tenant walk through the rental unit to look for any damage or illegal alterations to the unit. The landlord is looking for any damage in excess of normal wear and tear or any changes to the unit that have not been mutually agreed upon, such as changing the paint color. The landlord is comparing the current condition of the property to the condition of the property when the tenant moved into the unit.”
The primary purpose of the move out inspection is to give you, the landlord, an opportunity to assess any damage that may have occurred. This allows you to deduct the property amount from the security deposit (if necessary). It helps to prevent a situation where a tenant moves out and leaves you with a serious problem.
Move out inspections are often glossed over or forgotten about in the chaos of turning over a rental property from one tenant to the next. But if you want to maximize your profits (short-term and long-term) taking the extra time to conduct a thorough move out inspection will yield an array of benefits. Here are some tips:
The move out inspection should obviously take place as close to the move out date as possible. The precise timing may vary depending on state laws and personal preference.
In some states, inspections must take place on the precise date of a tenant’s move. In other states, it can occur within 48 to 72 hours after moving out. Then there are states where rules are extremely lax – allowing inspections up to two weeks before moving out and many days after.
In the state of Texas, there is no walk-through inspection required before a tenant moves out. However, in states where an inspection is required, it’s up to the landlord to inform the tenant when it’ll take place. (It’s highly recommended that you do the inspection on the day of move out so that there’s less chance for something to go wrong between when you see the property and when the tenant is off the premises.)
Tenants often have this belief that landlords are looking for ways to steal their security deposit. But the truth of the matter is that landlords don’t want to have to use it. They’d rather there be no need for deducting money from the deposit (because this indicates there’s no damage).
If you want to reduce friction on move out day, you should provide the tenant with clear and comprehensive instructions in advance.
“If the tenant understands the proper procedures for move-out, including the condition they are supposed to leave the rental property in, it will help minimize these issues,” The Balance explains. “Following these instructions, and adhering to the terms of their lease, will help ensure the tenant receives their security deposit back in full.”
A good set of pre-inspection instructions will explain when the inspection takes place, what must be done to prepare the property for inspection, how to handle certain aspects of moving out (like where to leave keys, what to do with trash, etc.), and any other requirements for getting the security deposit back.
Laws allow you to deduct portions of the security deposit to cover damages, but not normal depreciation of the property. Thus, as a landlord, it’s important that you understand the difference between actual damage and normal wear and tear.
Normal wear and tear are anything that can be expected to happen over the duration of tenancy. This may include any combination of scuff marks on baseboards, wear patterns on carpet, warping of doors or windows, small dents in drywall, cracked light switch plates, broken blind strings, etc. If you come across any of these issues in a move out inspection, they should not be counted against the tenant.
Actual damage is anything that occurred as a result of unreasonable use, an accident, abuse, or egregious neglect. This may include things like burns in carpet, pet urine stains, holes in walls, torn or missing curtains, broken windows, watermarks from overflowed sinks or bathtubs, or unauthorized painting.
When you do come across damage during a walkthrough inspection, it’s important to take copious notes and document the incident. This may include a written description as well as photos. In serious situations, you might even record an audio description and/or video.
The goal of taking notes is to protect yourself in a situation where the tenant denies the damage or disputes your decision to deny a portion of the security deposit in the form of a refund. Combined with detailed notes and documentation at move-in, you should be able to protect yourself from negative legal action.
Finally, make sure you’re understanding. Remember to treat tenants like people. It’s okay to give a free pass or to offer leniency on occasion. Don’t bicker over a $20 repair. Sometimes the best thing to do is suck it up and save the relationship. You always want to avoid burning a bridge whenever possible.
At Green Residential, we make it our mission to help Houston-area landlords protect their real estate investments by maximizing cash flow, reducing risk, and optimizing for efficiency.
Interested in learning more? Contact us today to find out about our comprehensive property management services.
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