One essential step that many new landlords forget is putting together a rental inventory of your property, before renting it out. While this is often overlooked, it is one of the best protections landlords can get against having to pay unnecessarily for damage to their property.
What is a rental inventory?
An inventory is a report on all the contents of your property at the beginning of the rental agreement. It also includes a detailed description of the condition of these contents, item by item. The idea is for you to be able to know exactly what assets your property had, and what condition they were in, at the beginning of the lease. It will allow you to monitor your property for potential damage and missing items.
How to take an inventory
The first thing you will need to do is make a thorough check of the property and its contents. Make sure that there are no cracks in the walls or windows, that all mechanical and electrical components (including everything from locks to lighting) are working, and that the water flow from taps and showers is steady and leak-free.
Next, you need to ask the tenant to run their own check, so that they can note any existing damage to the property before they move in. Show the tenant the results of your own check as well.
Remember, during the checking process, you don’t just want to focus on obvious problems. You should also take note when parts of the property are lightly worn, or, alternatively, in excellent condition. It also helps if you take pictures to document your observations.
Once both you and your tenant have thoroughly checked the property, you need to agree on the results. You should record the results on a Landlord Inventory Form and make sure that both you and your tenant sign it.
What to do after the inventory is taken?
You should continue to monitor and inspect the property. It's a good idea to inspect rental properties on a quarterly basis, This will allow you to keep apprised of gradual damage as it happens, and point out to the tenants what their responsibility is.
This, however, is not practicable for many landlords, and could cause a good deal of grief with tenant relations as well. At the very least, you need to do a final inspection to evaluate any missing or damaged items or areas that the property may have.
This inspection should be carried out after the tenant has completely vacated the property. It's a good idea to be extra thorough, moving furniture and changing lighting, so you catch any potential attempts to hide property damage. Don’t forget to refer back to your original inventory and pictures for comparison. This way you can make a good case for withholding some – or all – of the tenant’s deposit when necessary.
As a landlord, following each of these steps meticulously is the best way to protect yourself against having to shoulder the costs of any damage.