Categories
Landlords

Should Tenants Be Allowed to Make Home Improvements?

Nothing is worse than having a tenant who took “please feel at home” way too seriously.

While some tenants will only install their own wall decor or child safety latches on kitchen cabinets, some tenants make more permanent changes to the rental without your permission. This creates a whole lot of trouble—broken lease agreements, depleted security deposits, and costly restorations when they finally move out.

So, should tenants be allowed to make home improvements in any circumstances? Let’s look at some considerations.

Common Home Improvements to Expect from Tenants

Here are some examples of rental property alterations often done by tenants:

  • Painting the interior walls
  • Changing light fixtures
  • Changing appliances
  • Installing new locks on doors
  • Upgrading security systems
  • Changing the landscaping/garden

While these changes may be considered an actual improvement or upgrade to the property, you need to ask yourself the following questions before allowing them:

  • Will your tenants do a good job? They may not have the skill to carry out the project and may not adhere to safety or industry standards.
  • Who will pay for the improvements? They might expect a decrease in rent due to work done and materials used—even if the changes made are not up to par. 
  • Can you reverse the renovation? It’s possible that they deviate from the purpose of the original design (e.g., laminated floors are easier to clean than hardwood, simple landscaping is easier to maintain, etc.), which could require reversals in the future.
  • What does the lease state? Allowing them to break agreements might lead to them pushing their luck—further ignoring other clauses beyond just home improvements. 

You need to remember that your rental property is an investment—one that you should take ownership over, improve, and maintain according to your standards. Moreover, your tenants should see the importance of adhering to the contract and, ultimately, respecting you as their landlord.

What to Do If They’ve Done It Already

Should you discover that they’ve already made the improvements without authorization, here are three steps that landlords should do:

  1. Send a written notice of the home alteration, expressing your disappointment that they did not notify or seek permission before implementing the changes. Point out the specific lease clauses that they have violated.
  2. Warn the tenants that there should be no further changes done to the property without permission and that you’ll happily consider any changes they might still want to make.
  3. Outline the consequences of their action. This could range from just a fair warning to requesting that they reverse the renovation made—at their expense. If the alterations are extreme, you can deduct the cost from their security deposit upon Move-Out or proceed with eviction due to lease violation.

How to Prevent Tenants From Making Unauthorized Home Improvements

As they say, prevention is better than cure. So if unauthorized home improvements have been made by your tenants, make sure to review the lease agreements. Ensure that the following lease clauses are clearly stated:

  • Improvements that can only be done by the landlord or with landlord’s written permission
  • Improvements that can be done by either party
  • Consequences for alterations that devalues the property

Your goal is to create a space for tenants to freely improve their living conditions while being firm and clear with the boundaries. Even if you lucked out this time and the tenants did a great job improving the home, an unclear lease will open you to future problem alterations…and your luck may just run out.

Conclusion

Every rental property will need renovations and improvements from time to time. From repairing to re-flooring, landlords need to stay on top of their rental properties and make the necessary renovations when needed.

If your property can use a bit of work and you see that the tenants are capable of doing a good job, you should have no problems allowing them to improve the space. The bottom line is to make sure that they understand the boundaries and adhere to your lease agreements, and you should be good to go.

Do you allow your tenants to make home improvements? What are your non-negotiables? 

Image Courtesy of Polina Tankilevitch

Categories
Flipping

How to Find the Ideal General Contractor to Flip Houses

Finding a general contractor (GC) for your house flip can be challenging.

You want someone who knows what they’re doing, is trustworthy, has affordable prices, and has good reviews. This means you need to do proper research before hiring a general contractor—don’t hire the first one you find!

As a flipper, your main goal is to earn a high flipping profit in return for your investment. To do that, you need to renovate the house within a specific budget and timeframe, which means using contractors who stick to deadlines and understand the importance of flippers’ margins.

While simple repairs are easy to budget for and can be done within a month, more complex renovations can easily incur budget overruns and take more than a couple of months to complete. In these cases, it’s best that you hire a general contractor to handle the project for you, or assemble a team of go-to contractors that you work with regularly on your flipping projects. Which you go for will depend on your needs, but this article focuses only on general contractors.

Let’s go through some best practices for finding the ideal general contractor for your flip projects.

Independent Contractor vs. General Contractor

Before we go any further, it’s important to make a distinction between independent and general contractors:

  • Independent Contractors: These are contractors that you directly contract to perform tasks on a contractual basis. They complete the project themselves, without the help of subcontractors.
  • General Contractors: These are also directly contracted; however, tasks are subsequently contracted to subcontractors to complete. They complete the project along with their subcontractors instead of completing the project by themselves. They also handle all the administrative tasks needed (e.g., paying subcontractors, securing building permits, getting insurance for all workers, etc.).

General contractors will coordinate with necessary subcontractors on your behalf and oversee the project for timely and on-budget completion. They are ideal for major renovations and flips, because you can get all aspects of the renovation handled by a single entity.

What to Look for in a General Contractor

Here are the key things to look for in a general contractor:

  • A Good Reputation: The best way to find a general contractor is by asking for recommendations. Contractors work largely based on referrals. Ask your friends and the real estate community if they can vouch for somebody reliable, communicative, and punctual.

Once you have a list of options, go the extra mile to read online review websites and visit the Better Business Bureau to check their reputation and ask about the projects they’ve worked on before. 

  • A Good Contract: Hiring a GC on a handshake is not a good idea. You’ll want a contract that spells out what they will do and what you will do, with deadlines. The more thorough the better! Otherwise, there’ll be no accountability and your project can go sideways quickly.
  • Appropriate Payment Practices: A good general contractor will accept payments in the form of checks and wire transfers. They would also agree to sign a lien release before payment and negotiate with you on the payment schedule.

Stay away from contractors who want you to pay in cash or a lot upfront. Cash payments are not illegal; however, contractors who ask for them might be avoiding paying income taxes. This is a practice done by less-than-reputable contractors. Moreover, a down payment of 30% of estimated costs is typical to cover an initial retainer and materials, but an established contractor won’t need your full payment to start the job.

  • Local Coverage: Hiring a general contractor who lives and operates within the area of your flip is your best option. They will know the local building codes, city inspectors, have a network of subcontractors ready to help them, and you can easily contact them in the event of an emergency.
  • Proper Licensing: General contractors need to be licensed to pull the necessary permits for your property. Without these, your property won’t abide by the local building codes or pass inspection. You’ll end up financially responsible for bringing up the property to the required standards.

Instead, verify their license by asking for the license number. Check it with your state’s licensing board. For licensure information in Michigan, visit the state’s Department of Licensing and Regulatory Affairs website for details on the Bureau of Professional Licensing’s requirements.

  • Proper Insurance: General contractors should be insured for General Liability Insurance and Workers’ Compensation. You can ask to see a copy of their policy and call up the insurance company to verify the information. The insurance should be current and have clear policy limits for you to check. You should also be added as an “additionally insured” on their policy, until your project is complete.
  • Warranty in Writing: General contractors should provide warranties that cover the work they’ve done in your property. A warranty assures them that they won’t be coming back for multiple repairs over an extended period of time (warranties typically last one year only) while guaranteeing you a good renovation result.

This list isn’t exhaustive, but it’ll put you on the right track in finding your ideal general contractor.

Questions to Ask During the Interview

As part of the process, you should also have an interview with the general contractor. Here is a list of questions you can ask to help you identify those who’ll fit your criteria:

  • How many people work for you? How long has your crew been working together?

You want to work with an established company that has a large team of managers and assistants.

  • Where are you operating, and what is your service coverage?

You want to work with a local company that knows its way around renovations in the area.

  • What similar past projects have you completed?

You want to see their experience concerning the project you’re giving them. If they’ve never done what you need them to do, ask them how they will approach the project.

  • How do you communicate with your clients?

They should give you daily or weekly progress reports with photos and send itemized, detailed quotes and invoices.

  • For this project, will you be using subcontractors or just your own team?

If they are using subcontractors, make sure that all workers are trained, licensed (if applicable), and insured.

  • Are you licensed and insured?

Licenses should be updated and registered in the state where your property is situated. Insurance should include General Liability Insurance and Workers’ Compensation.

  • What would our contract look like?

Not all general contractors will have contracts. If they don’t, you can draft one up. Regardless, have your lawyer review it before everybody signs.

  • Will you provide warranties?

Make sure the warranty is written down and will conform to the requirements of the contract.

  • How will the payment schedule and plan work? Will you agree to sign lien releases?

Agree and sign the payment schedule before the job begins. They should agree to sign lien releases before payment.

  • Have you ever had to deal with lawsuits?

If they’ve been sued, ask what happened and how they handled it. If they’ve sued a client, ask for further information and check public records. If they’ve had serious accidents before, ask how they dealt with the situation and what they’ve improved to make sure it doesn’t happen again.

Conclusion

We hope this article is enlightening and helpful in your search for a general contractor. It might take a lot of effort, but having a reliable and skilled general contractor will protect your budget and timeline for a successful and profitable house flipping project.

The better your general contractor, the more houses you can flip fast, at the highest quality, and for the most competitive price.

Any additional tips for finding the ideal general contractor as a flipper?

Image courtesy of Andrea Piacquadio

Categories
Shortterm Rentals

Cleaning Checklist for Every Short-Term Rental Landlord

Image Courtesy of Tirachard Kumtanom

End of stay cleaning can be frustrating for short term rental owners, especially those who manage their properties themselves. It turns out that “clean” is very subjective—what’s clean for one guest is a pigsty for another. And if they’re unhappy with the cleanliness of your property, chances are they’ll be vocal about it in the review they leave you on Airbnb.

To avoid wondering whether the property is clean enough to satisfy even the most particular guests, it’s crucial for landlords to have a cleaning checklist. A cleaning checklist doesn’t only help make sure your property is well-maintained and sparkling clean for the next guest – it also helps you stay on top of any issues or damages that outgoing guests may have caused.

Plus, if you’re hiring professional cleaners, the checklist can serve as a guideline for them to use when cleaning your properties, making sure they’re cleaned to the same high standard for every turnover.

Not sure how to start your checklist?

We’ve put together a general cleaning step-by-step guide that you can alter to fit your needs.

Bathrooms

  1. Clean:
    • Mirrors 
    • Windows
    • Floors and tile walls
    • Wastebaskets (don’t forget to put extra trash bags inside)
  2. Clean and sanitize:
    • Toilet
  3. Clean, sanitize, and scrub:
    • Showers
    • Bathtubs
    • Vanity sinks
    • Backsplashes 
  4. Refill toiletries:
    • Handsoap
    • 2 rolls of toilet paper
    • Makeup wipes or tissue wipes
  5. Replace with clean items:
    • 1 hand towel
    • 1 washcloth
    • 1 bath towel per guest
    • 1 shower mat per bathroom
    • Shower curtain liners (optional)
  6. Check if sinks, tubs, toilets, and faucets are running properly.

Pro tip: We recommend that you tackle one room at a time so you won’t miss out on any of these tasks.

Bedrooms

  1. Change sheets, blankets, and pillowcases.
  2. Vacuum floors, including under the beds.
  3. Check drawers, tables, and closets for personal belongings.
  4. Clean the mirror and windows and dust the furniture.
  5. Check for stains and wear and tear on the sheets and pillowcases.

Pro tip: One cleaning trick is to close the door of the room that you’ve just finished cleaning–this way, you’ll know which rooms still need cleaning and which you’ve already done. Plus, it will stop any wandering pets or people from going inside and messing up the beautiful work you’ve just finished.

Living Room

  1. Clean, dust, and vacuum the entire area.
  2. Dust:
    1. Furniture
    2. Picture frames
    3. Decorations on display
    4. Lamps
  3. Vacuum carpets or wash the floors with specialty cleaners.
  4. Place 2 standard pillows and 1 clean blanket for the sofa bed.
  5. Place the remotes, welcome packet, and other welcome items for the new guest in an easy-to-locate spot (like the center of the coffee table).

Pro tip: When wiping and dusting, the dirt will naturally fall to the lower furniture and the floor. Thus, it’s best to start cleaning from the top and work your way down to the floor.

Kitchen

  1. Clean:
    1. Counters and countertops
    2. Chairs and tables
    3. Sinks and backsplashes
    4. Glass doors and windows (if any)
    5. Appliance exteriors, including the coffee maker and toaster crumb tray (also check if they still work or are malfunctioning in any way)
    6. Inside and outside the refrigerator (and throw away any leftover food)
  2. Empty:
    1. Dishwasher and replace items in the cupboard
    2. Ice tray
  3. Sweep and mop the floor.
  4. Supply:
    1. 2 clean dish towels
    2. New dishrag, sponge, and soap
    3. 2 trash bags
    4. 1 roll of paper towels
    5. 2 dishwashing pods

Pro tip: Start cleaning at the area furthest from the door, and then work your way towards the doorway—this way, you avoid stepping on wet floors and dirtying them again on your way out of the kitchen.

Before Locking Up

  1. Turn off all lights and unplug appliances (except for the refrigerator, aircon, and TV).
  2. Set the thermostat to a temperature that doesn’t keep the unit running.
  3. Place patio sets and other outdoor items inside or in a covered storage area.
  4. Place trash bins by the road.
  5. Ensure that all doors are locked to prevent break-ins.
  6. Make sure cleaning supplies are well stocked.

Deep cleaning

  1. Clean:
    1. Exterior and interior of cabinets
    2. Lamp, lampshades, chrome fixtures, and display items
    3. Stovetop and range hood (and replace filters if necessary)
    4. Dishwasher
    5. Behind and under appliances and furniture
    6. Walls, baseboards, moldings, and tiles (and remove markings, if any)
    7. Door frames, switchplates, and other woodwork (remove any fingerprints or other marks)
    8. Windowsills, ledges, blinds, ceiling and electric fans
  2. Vacuum cushions and upholstered furniture.
  3. Deep sanitize sinks, countertops, and appliances (including oven and microwave).
  4. Wash windows and glass doors.
  5. Change air filters.
  6. Descale faucets and showerheads.
  7. Disinfect all surfaces and contact points.

Pro tip: Aside from the regular cleaning you do on your property between guests, you will also need to do deep cleaning once in a while. Deep cleaning ensures that your entire home is free from dust and dirt, which helps maintain your appliances at maximum efficiency (e.g. air conditioning units).

Conclusion

End of stay cleaning may be complicated and frustrating. But with a checklist that’s customized to your property and needs, it doesn’t have to be!

Checklists instruct professional cleaners how to make your property perfectly presentable for your next guest, and they can also help you make sure you haven’t missed a spot when doing DIY maintenance for your short-term rental. 

Going through after each turnover to make sure every box has been ticked on this list is your best bet at ensuring a 5-star cleanliness rating from every guest you host – and that’s a highly valuable thing to have when it comes to attracting new customers to your STR business.

How do you clean your property between guests? Are there other items that we should include in the checklist?