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by Brett D Furniss

As a Charlotte property manager for a good nine years now, I’ve seen a lot of rental homes come and go; some rented quickly and some didn’t. Most of the houses weren’t perfect, but almost all of the houses that rented quickly had one thing in common- they were really clean. And you may be surprised on how many really dirty homes are on the rental market!

“Cleanliness is next to godliness” is the popular axiom, and it’s also a heck of a differentiator in the rental home business. The #1 secret of renting a home quickly is making sure it is really clean. That’s it. If you can get someone to look inside the home and it is really clean, the closing ratio is 80%-90%. I’m not joking. If the cleanliness does not meet the tenant’s expectations, it is the top thing property managers hear about.

But how clean is clean? Is a $150 baseline cleaning job sufficient or is a $600 cleaning job necessary (where every surface is touched by a great team of maids and one could ice skate on the floors after eating off of them)? That’s a tough question. Every tenant has a different idea of what is “clean”.

Rental homes are about ROI. So the real question is, “Is $600 a good investment that will procure a higher rental rate?” Most owners are not going to be happy paying $600 to clean a home that they don’t live in, when they would never pay $600 to clean a home that they do live in! But is it smart to do it anyway?

Renting out homes isn’t rocket science. It’s about the value proposition each house makes versus the other houses on the market. For example, if you go to the grocery store and see that regular bread is $1 a loaf and the whole wheat bread is $2, which do you pick? If you don’t see value in paying an extra $1 for whole wheat, then you’ll pass and buy the regular loaf. If a clean house is renting for $1,500 and a dirty house is renting for $1,400, which do you pick? It’s that simple. And a lot of people will pay extra for the value of a really clean home.

Before landlords have a heart attack and think that it is necessary to get a $600 cleaning job on all their vacant rental homes, I’ll give the caveat that it isn’t always prudent. The higher the value of the home, the nicer the cleaning job should be. This also works from a ROI perspective. If a really clean house allows the market to charge an extra 5% a month of rent (which isn’t unreasonable), then:

1. $1,000/month home becomes a $1,050.00/month home. On a one-year lease, that’s an extra $600 annually. A $600 cleaning probably isn’t warranted (0% ROI), but a $300 cleaning would deliver a nice ROI (100%).

2. $2,000/month home becomes a $2,100/month home. That’s an extra $1,200 annually. A $600 cleaning job would be warranted if it produced a ROI of 100%.

Besides the empirical ROI dollar figures, there are also the soft numbers to consider. Clean tenants who take care of rental homes like to move into really clean, rental homes. And guess what? Most of them are turned off by dirty homes and won’t move into them. The tenants who are willing to move into dirty homes usually are not concerned about the condition of the homes like the clean tenants are. So which type of tenant do you want to attract to your rental home?

With rental homes, ROI is king. And a $600 maid service can push you further into the black!

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. You can contact him directly at [email protected]. For a FREE subscription to “Charlotte Property Management Weekly” visit http://www.BDFRealty.com/Blog.php.

Article Source: http://EzineArticles.com/?expert=Brett_D_Furniss

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  • Robert

    Works for me – I make a lot of money off of just having clean units. Maintenance works on the ROI basis too. Not fixing something only means you have the money to use until the time comes you do fix it. If you don’t paint this year, you can use the money until you do paint next year – a small advantage, interest for a year, and of course in the mean time you get lower rent. The only way you can really save money on deferring maintenance is to never do the job. So if you’re ever going to do the repair, do it now and start collecting that higher rent right away.

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