Charlotte Property Management Weekly: Delayed Rental Walk-Throughs Cost Everyone Money

Unfortunately, I’m yawning as I’m writing the title of this article. I’m not sure how to jazz it up a little (maybe “Lindsey Lohan falls for property manager during rental walk-through! Then she heads back to rehab.” I’m intrigued at least.




That would be a nice segment into this! Instead, coming in a close second in terms of excitement, I’ll give the definition of the walk-through so we’re all on the same page: A walk-through is simply visiting a rental property after a tenant moves out and assessing the damages. Then, one would deduct the damages from the tenant security deposit and mail the tenants the check.



I figured I’d write on this topic after a friend told me he’s still waiting for his rental security deposit back 7 weeks after move-out. Yes, a property manager holding it this long (without a written explanation) is illegal in North Carolina, but that’s not the point. It just doesn’t make any sense financially.



Let’s look at the stakeholders when a walk-through is not done in a timely manner:



1. Tenant: He wants his money back! He now thinks unfavorably of your property management company and is actively plotting his revenge against you (sad, but true).



2. Rental home owner: He is footing the bill everyday the property remains vacant; vacant properties are generally tough to fill if they are not cleaned up and put on the market (requires a walk-through…). If owners are withheld cash for long periods of times, they tend to find property managers who disburse it to them on more regular intervals.



3. Property manager- this is the primary loser in this game for many reasons.



First of all, there is the oft-cited statistic that the #1 reason why 90% of businesses fail is due to lack of cash flow. And vacant houses don’t typically bring in any cash flow; however, they certainly have the potential to! Let’s look at the revenue that a vacant house can bring in. The fee list includes (but is not limited to):



1. Fixing the home up fees

2. Application fees from tenants

3. Tenant procurement fee

4. Monthly management fee

5. Potential brokerage fee if the house is also on the market for sale



None of the above money-making happens until a walk-through occurs.



Also, there is a lot of talk about the vital importance of working capital; this is the money that is in your bank account that funds day-to-day business operations. Experts say to collect money faster from clients and pay vendors slower in order to keep this account flush (because without money in it, you’re essentially out of business).



If this is the case, it behooves property managers to conduct walk-throughs as soon as the tenant moves out! It pushes up the earning of cash flows from vacant homes and makes customers happier.



I mean, why wait seven weeks to start getting paid when you can get the cash now?



Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. His newest book, A Real Estate Agent’s Complete Guide to Representing Rent-To-Own (Lease Option) Tenants (Delight Clients, Fill Vacant Homes, and Earn $2,250* Upfront! (*Minimum!)