How to Prepare for A New Tenant
Hello! As usual, a few caveats. Remember, this applies primarily for Landlords in Massachusetts, at least as far as statutory law is concerned. And in any case, I am not a lawyer, and this should not be construed as legal advice.
1) Notice. Tenants must give one-pay period notice (this is usually a month), unless you have pre-negotiated different. I negotiate 60 day notice, typically, but the standard is 30 days. If you're tenants have not given proper notice, you can't really stop them from moving out (nor should you), but you should tell them their security deposit may be at risk. A typical situation might be, say on the 10th of the month, when you call them and say, "hey! Where's the rent?" and they reply, "Oh, we're moving out at the end of the month, so we aren't paying you this month." The timing of this phone call/e-mail/letter is very important, legally. If they tell you two weeks before they move out, technically that is notice for the following month. That means they can't use their last months rent for the current month, and they owe one more month. They probably won't pay you (but they might), but you should tell them that the security deposit will be collected for the following months rent. I'm always very clear about what happens if I don't get notice, you should be as well, but some tenants do not seem to think that far ahead.
Once tenants move out, it's time to make the
unit look it's best again. It can take a little time - and money.
2) If the notice has been given, and is proper, than it's time to reconcile the deposits. You should have received:
Last Month (this is their initial deposit, which you collected when the tenant was approved. Right?)
Security (this was collected when they moved in, and put in a separate account. Right? You still have this money somewhere? It's not yours - they'll want it back)
The last month is for the last months rent. They will not be paying this month, so be aware if you haven't re-rented it (and collected the next tenants last month), you will be missing some cash flow, unless you have saved it for this moment.
3) Moving out mid-month. Tenants often do not move out on the last day of their lease. They often ask you to "pro-rate" the rent for the time that is unused. This is up to you, but is not required. If you know there are things you need to fix that fall under the "Wear and tear" category, I would use that money for it - security deposits can be scrutinized.
4) Security deposit: Tenants often ask for a "pre-move out walk through", or ask for the security deposit before they move out, or ask for the security deposit to be the second to last month's rent (or last months rent if you failed to collect it). Some times they ask for all three! My recommendation is NEVER EVER give that security deposit to a tenant until the unit is empty and you have received keys. State law gives you 30 days AFTER THEY MOVE OUT to review the unit, itemize the damages, and return their money. They won't like it, but it's the law, and that tiny security deposit is all that prevents them from doing damage to your building, so don't give it to them. Similarly, doing a 10 minute walkthrough the day of move-out and writing a check on the spot is also a poor idea. I have had tenants hide stuff (quite successfully) to pass a 5 minute inspection. Most tenants are very concerned that you will not pay them anything from the security deposit. Expect them to be concerned about the "delay" in giving them their money. But you are ENTITLED to the 30 days, and you should use what you need. Here are things you should check.
- Garbage disposal. These are often broken and never reported. Until the next tenant moves in, of course.
- All toilets: check for loose toilets, leaks at the stops, proper operation, cracks in the fixtures themselves. Listen for leaks. I recommend turning off, and turning on all shut-offs between tenants. This makes sure they are not leaking, and in operation.
- Faucets - check shut-offs for leaks. Turn on the faucet, hot and cold, let it RUN for a minute or two, and check for leaks, or poor water pressure (clogged aerator or screen, usually).
- Carpets: check carpets for light stains and permanents stains. Most new tenants want cleaned carpets anyway, it's easier to do it right after move out (when the unit is vacant) and then assess the stains post clean up.
- Walls/ceilings. Tenants LOVE To put holes in walls. I charge $25 for every hole, up to $400 for room walls, up to $400 for trim per room, and up to $400 for ceiling holes. This is what it costs to get it fixed (about $1000-1200 per room, for ceilings, walls and trim). Why up to $400? Once there's 16 holes, you're painting the whole wall.
- All kitchen cabinets. Check for easy operation and cleanliness.
- Fridge - put it out and clean the coils and get the dust out. You know they didn't. Check for leaks from the ice maker line, if you have one.
- Stove fan: Check/clean the grease trap. Make sure the fan is working.
- Dishwasher: run it, check for leaks.
- Switch plates: get 'em cleaned. Make sure they aren't scratched.
- Tile floors: Make sure no tiles are damaged from someone dropping something heavy. If so, get a new tile put in. Charge them for the damage.
- Garage: It was empty when they moved in, it should be empty now. If there are things that need to be hauled away, that will cost them $$ of security. Look for oil stains, gas spills, and other things that could be haz-mat, or just damage. Spilled salt can ruin concrete. Sweep and light clean the garage.
- Basement: see garage.
- Check A/C, if summer. (Don't check the A/C if it is below 45 degrees, you will damage it). If you haven't had your heat/cooling equipment serviced in a while, think about doing it now. Being pro-active saves you money with tenants that need heat in the winter. Emergency calls are expensive.
- Check the age of your hot-water tank. Put a reminder in your calendar when it hits 10 years, and start checking it more often. Leaks start slow, and often start at the bottom.
- Check all vanity cabinets
- Check the shower faucet for leaks, and the shower head too.
- Check all burners on the stove, and the oven too.
- Check all the windows to make sure they are not broken; check any/all blinds for same. Have them cleaned or replaced if necessary.
If you own a single family home, check the outside too, for damaged shingles, siding, screens, and review the lawn and landscaping. Don't let your property go downhill just because you're renting it.
Once you have a list of damage and things that will cost you money (other than wear and tear, which you can not charge for. That 20 year old dishwasher that is broken? That's on you, not them.), make the list, put costs next to it, and send it (by mail) to the tenant with the remainder of the their security deposit within the 30 day limit. Note that it is your responsibility to charge "Fair-market" prices. If you aren't sure what something costs, get estimates, and keep them. You can't charge $1200 for a nail hole, unless they put the a very big nail through the fridge. Tenants do not have to "agree" with your assessment, but if they don't like it, or find it unreasonable, they may sue you, as is their right.
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About Matt Heisler
Matt Heisler is a real-estate professional and owner of this website. He has been selling homes in MA for buyers and sellers for over 20 years. He is an expert in foreclosure purchases, short-sale purchases, short-sale sales, buy and hold investing, fix and flip investing, and of course traditional residential home sales. He is happy to take questions as they pertain to real estate on Title V, Radon, Termites, Sump Pumps, Roofs, Foundations, Wells, Septic Systems, Cash-Flow, Staging, and a host of other housing issues. As a Vanderbilt University alumnus, he is proud to serve his local community.
*All information is posted in good faith and is assumed to be reliable, but may rely on third party information sources.