Condition of the Property- The condition of the property will determine your ability to rent it quickly, get top dollar, and get financing.  More important, a property in bad condition is more apt to have mechanical breakdowns which eat away at your profits.  So it’s a good idea to make sure the tenant(s) keep it clean and well maintained. Clutter can be a potential fire hazard.  Most owners inspect around appliances, such as water heaters and furnaces, but even in the main living quarters clutter is a danger because if a fire were to occur, the tenants might not be able to get out safely- opening you up to unnecessary legal issues.

Mold and Mildew seem to be the buzz words for the 21st Century.  When addressing the condition of your property, make sure to have proper ventilation to keep mildew and mold from growing.  Some municipalities are now condemning buildings with excessive black mold, so it’s worth the extra effort to keep it from starting.  It’s also a good idea to inspect properties 1-2 times a year for roaches, mice, and other pests.  Keeping vermin at bay not only makes renting vacant properties easier, but mice and rats have been known to chew through electrical wiring which can be an expensive endeavor to fix.

Next, evaluate the exterior of the property. What does it look like at night? Exterior lighting might make the difference in keeping unwanted break-ins in empty units from happening. Also, would your tenants feel safe? A feeling of safety might help justify a higher rent.  More important, would your tenants BE safe?  Cracks in stairs or walks, loose handrails, poor lighting, and other obstacles are the makings for landlord lawsuits that can cost thousands to defend.

Does your property have a playground, play area or swimming pool? Is it safe? Are there safety rules posted?  Do you have a plan to keep out uninvited guests?  How do you deal with unsupervised children?  Over the past ten years, there has been a flurry of regulations regarding playground equipment and swimming pools.  If your property has one, it might make since to bring in a playground consultant to make sure you aren’t primed for fines or penalties.  You cannot expect your property managers to play parents.

Insurance- A good liability insurance policy can reduce your personal risk should something go wrong at one of your properties. Experts consider a $2,000,000 policy with a potential for two occurrences to be a good idea. Of course, insurance for fire or other disaster shouldn’t be forgotten. If your building is old, building codes may have changed that prohibit you from rebuilding or make it expensive to do so.  Make sure your coverage is enough to rebuild it to current building codes.  Understanding your risks and your insurance coverage is critical to maximizing your profits. Meet with your insurance agent at least once a year to go over your coverage.  It’s also a good idea to require tenants carry renters insurance to protect you in case of fire or a broken water pipe.

Management- Investment properties don’t manage themselves. On-site managers need training on how to protect and maintain the property and the owner from potential loss or liability. Inspecting properties yourself, even if you have a property manager, is something you should consider doing at least once a year.  Remember, things that were fine 4-5 years ago when you bought the property might be old and worn-out now. A little common sense and some preventive steps can be the difference between making money and losing it.