Why keeping up on maintenance and aesthetics as a landlord will cost you less in the long run.

TL:DR

Respect begets respect.  Trash begets trash.  #Vibesbegetvibes, as the kids might say. This theme occurred over and over again during my time as a property manager as it relates to property owner maintenance and aesthetic upkeep of a home.  While it’s obvious that fixing or replacing broken items is a given as a landlord, we need to chat about the long term affects and unnecessary costs associated with neglecting maintenance and aesthetic repairs outside of this scope.  

In an effort to save money it’s tempting to say ‘bye felicia’ and shove off aesthetic items such as carpet and paint, especially because they are a higher cost item and need replaced every so often depending on wear and tear.  But I highly advise you replace them as needed when they start looking drab.

Why? 

Ownership mentality.

It starts with an ownership mentality.  Renters will not respect and make an effort to keep up a property the owner themselves is not willing to maintain.  This mentality directly transfers from the owner to the tenant.  If the owner doesn’t care about how the property looks, why should the tenant?  Time and time again I witnessed this theme.
 

It’s kind of like when you get in that one friends car that’s decorated in fast food wrappers, clothing articles, and the seats are littered with coffee and soda stains.  You don’t feel as self conscious about spilling something, right?  Your friend probs won’t notice if you leave your own trash because it’s already trashy?  It’s the same concept with a home.  The landlord sets the tone for the renter by how they maintain the home.  This includes upkeep in between tenants and throughout the tenancy. 

You might think you’re saving a few bucks up front by not maintaining the landscape in between renters or waiting 10 years in between paint jobs, but the tenants are going to be much harder on the property in the meantime.  I’m not saying this is right or fair but I’m saying it’s what I saw and held true a majority of the time.

Yes, there were rare instances where a renter would lease a dump and turn it into the best version of itself possible.  But those cases are just that: rare.  In addition, once renters get the hint they’re doing all the work and you have no plans on helping in any way (or just plain don’t care), they’re going to move on to something better and to a landlord that respects and values their efforts.

Continual upkeep helps justify rent increases and reduce turnover.

Many times the state of the rental market, rising costs, taxes, and significant repairs contribute to warranting a rental rate increase and such is communicated to the renter.  However, if you’ve been intentional about keeping up the home and the renter has witnessed your efforts, it’ll be justifiable to the renter when you communicate a rent increase to them.

You’re not required to justify a rent increase to a tenant and we know rent increases are given every day in areas around the United States without a single care.  But you should care.  The renter-landlord relationship should be a collaboration marked by communication and mutual respect.  Herein lies the key.  We want renters to feel supported and taken care of as they steward your real estate investment.  We want landlords to have a solid relationship with the renter or property manager that enables them to have a streamlined owner experience topped off with maximum ROI.

As a renter, it feels demoralizing living in a shoddy, unmaintained rental that hasn’t been upgraded in years and then get a rent increase on top of that due to ‘the market.’  I understand this is how investment properties operate and what the tenant agrees upon when signing the lease.  But there has to be some give and take from both parties to make it the best experience for everyone.

If you decide to institute a rent increase when you haven’t maintained the home you may risk the tenant moving out.  You might think, ‘fine, I’ll just re-rent it at a higher price’ and that could potentially work if you’ll be asking hundreds of dollars higher per month.  But if the tenant is going to leave and you’re going to re-rent it for $50 higher a month, it’s going to cost you more for the tenant to move out and the associated maintenance and turnover costs involved.  Especially if the renter has been maintaining the home relatively well, it’s best to consider a lower rent increase in order to keep the renter in place. 

The bait you use attracts the fish you catch.

Even before a renter moves into a home, the bait you use attracts the fish you catch.  Meaning, if your house is already dumpy and under maintained, you’ll attract folks who are looking for similar quality or at the very least will accept that quality as their minimum standard.  Quality renters want quality homes.  

Sure, there’s always poorly qualified folks who apply for worthy homes alongside quality applicants.  But overall you’ll have a wider pool of renters to consider.  When you have more applicants, you have more choices.  

Story time:

The principle of trash begets trash brings me back to a beyond dumpy house we ALWAYS struggled to rent.  Even in a spicy rental market where homes were getting rented within 48 hrs of being advertised, this particular home sat for over a month while we tore through stacks of applications.  The house was fugly, had few amenities, and hadn’t been updated since its construction in the 1970’s.

Nothing but unqualified renters with cringe worthy credit, bad rental references, and hardly acceptable income applied for the home.  We finally found someone who was barely passable, presented them to the owner for a final approval, and signed the lease with their blessing.  

During the first 6th month inspection of that renter we found:

-The renter had incorrectly threaded the hot water connection on the washing machine causing it to leak into the drywall and completely saturate the living room floor behind the wall.  This had been occurring since the tenant moved in and connected the washing machine, which was 6 months.
 

Total cost to repair: $5,500.

During the second 6th month inspection we found:

-A makeshift wall the tenant had installed themselves which turned the rec room into a 4th bedroom so that two unauthorized tenants (not on the lease) could have their own bedroom.

Total cost to remove wall and restore rec room to original state: $2,000.

-A leak underneath the bathroom sink that had been duck taped in an attempt to ‘repair it.’  The tenant acknowledged they knew about the leak but thought the duck tape would fix it (???).  The leak had been ongoing for months, according to the tenant, and had saturated the entire vanity, bathroom floor, and had seeped underneath the shower surround.  

Total cost to repair everything: $7,000.

This renter alone caused almost $15,000 worth of damage.  Should the tenant be responsible to pay this?  Absolutely.  Will the renter actually pay this when they could barely qualify to rent the home in the first place?  Likely not.  Sure, you can lawyer up and pursue this renter for the charges.  Best of luck with the lawyer fees and time it takes to make all that happen.  

In the meantime you’ll still have to pay the contractors to take care of everything and get the house rentable again when you could’ve upgraded the house in the first place.  Will insurance cover it?  You’ll have to check your coverage to see if it covers sudden and unexpected leaks or if it includes gradual leaks that have been ongoing for months.

Set the tone before the renter moves in.  

I use the story above to showcase how the lack of consistent maintenance and upkeep attracted a renter who also held the same values.  They felt no qualms about not reporting serious maintenance issues and treating the house with little respect.  This could have been totally avoided had the property owner kept up with maintenance and aesthetics throughout the years.  Instead, the sad state of the home caused enough damage that the owner ended up owing money on the house the entire time the renter lived there.

Even though this situation ended badly, I’ve also seen tremendous success stories, where an owner who takes pride in their rental home is paired with a quality tenant who also takes pride in maintaining it, by making sure the lawn and landscaping are kept up, reports maintenance items, takes care of minor maintenance issues themselves, and takes care to treat the home with overall respect.

At the end of the day the decision rests with you as the landlord to spruce up the digs. I hope you absolutely do because it will increase your property values and attract quality renters.  Sure, it’s expensive to keep up on maintenance and aesthetics.  But it’s more expensive to have a reckless tenant who trashes the place.  

Best of luck on your spicy upkeep and may it always attract quality tenants!