Property damage is an inevitable part of the rental business, especially if you own single-family properties. However, before you can send tenants bills for repairs, you should first figure out exactly how much they owe you.
Figuring out the cost of damages can be quite challenging since you need to figure out the difference between the usual wear and tear and the damages caused. Still, we’re about to enlighten you with a few easy strategies so you can determine how much you can charge renters for the damages they left behind.
Wear and Tear
In order to charge your tenants for damages, you will first need to clearly understand how much of it is wear and tear. Among the best ways to do so is to conduct inspections before the move-in process.
Having checklists during the move-in process can help landlords record the condition of the property before their tenants move in. In doing so, property managers and owners can sidestep potential disputes.
This particular strategy also gives us a benchmark to compare inspections in the future against. Therefore, you will be able to record damages as they occur.
Educate Renters In Advance
You can easily define which kinds of damages are considered to be wear and tear and which will be considered as damages. For instance, property managers and owners tend to create well-planned guides that label either kinds of damages to educate tenants about the possibility of future charges.
These guidelines clearly illustrate the difference between a few holes in the walls produced by nails (considered wear and tear) and excessive or large holes (considered damage).
Another appropriate example can be of a carpet that has been worn out after years of use (wear and tear) as opposed to rugs that are torn, permanently stained, or carrying an awful odor (damage).
When Damages Occur
In the event that damages do occur, your next step will be to determine the reasonable cost for replacements and repairs. Instead of charging your tenants for the entire cost of replacement or the cost of a new item, you should factor in the age of each item, its original costs, and how much time repairs may take. Alternatively, you can also consider whether you will need to hire a professional for repairs or DIY your way out of the problem.
For larger repairs, you should consider collecting a few estimates from licensed contractors. Doing so can get you a more accurate estimate of the costs of repairs and how much you can ask from your tenants.
Standard Repair and Cleaning List
An alternative method of establishing a repair and cleaning list is to list down items that are commonly damaged and their estimated costs of repair. This approach has its own advantages and disadvantages.
For example, if you choose to add this list in your lease agreement, you will be able to educate your tenants about the risks of damages beforehand. As a result, tenants will be a lot more careful with your property.
On the other hand, the disadvantage of this strategy is that if your repairs were to cost more than what you wrote on the list, you might have to pay for the difference yourself.
Are you having trouble figuring out how much to charge renters for damages? You aren’t alone.
If you’re planning on avoiding these problems in your rental property you can always delegate these tasks to your property manager or hire the right professionals for the task at hand.
If you haven’t hired a property manager already, click here to learn more about our services and how an experienced property manager can share some of your burdens.