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Saturday, December 18, 2010

Should Renters Hire Inspectors?

Rental Repair Risks; or, Becoming an (Unpaid) Property Manager

In the history of the world, no one has ever washed a rented car.

--Thomas Friedman

Until recently, my answer to whether prospective renters should hire (and pay for) a professional inspector would have been "no."

That's because if something non-trivial breaks, most leases specify that the owner -- not the renter -- is responsible.

It's also the case that if the home is listed for sale, at least in Minnesota, the Seller is obliged to provide a detailed disclosure -- which the prospective renter should ask to see and then review carefully.

So, there already is a record of the home's condition.

Combine that with a visual inspection/home tour, and any conscientious renter would usually have a pretty good sense of the home's condition before signing a lease and moving in.

Renter Due Diligence

Usually, but not always.

After moving into a rental home this Fall, a (selling) client of mine has been dealing with a cascade of problems, both big and small, that were nowhere to be found on the Seller's Minnesota disclosure.

Some of the problems, like a non-functioning Bedroom radiator, were new; others were more in the realm of fallout from previous "do-it yourself" electrical and plumbing repairs, plus issues with the home's construction quality generally.

And even though the owner picked up the repairs bills, the inconvenience was borne by the renters.

Oxymoron: "Out-of-State Property Management"

In that spirit, my new advice to prospective renters is to consider paying for a $300- $400 home inspection if one or more of the following apply to your situation:

--You are contemplating a multi-year rental.

--The cost of an inspection is small relative to the rent you'll be paying (say, more than $2,000 a month).

--The rental home is older and bigger (more than 3,000 square feet, and built before 1960).

--The owner is out-of-state, and doing the property management themselves.

As my clients have discovered, there is no such thing as "out-of-state property management."

Rather, they are doing the property management -- getting quotes, meeting contractors, etc. -- and the owner is simply writing the checks.

1 comment:

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