New BiggerPockets Article: Why Quality Checks on Turnovers and Rehabs Are So Important
And how to master them
This is an excerpt from an article originally published on BiggerPockets.com
Picture this: You just moved into your brand-new home, having just relocated to this town days ago to start your new dream job, and are full of excitement. The rooms are filled with that brisk smell of having recently been painted. The countertops don’t have a speck of dust on them and glisten whenever the sun’s light touches them. The master bedroom is on the second floor, with a large bay window that looks out on the beautiful park next door, the downtown in the background.
You smile with satisfaction, knowing that all that’s left is to go through the arduous process of moving all of your stuff in, and then you can relax to a well-earned night of sleep in your new place, in a new city, with a new job.
And then…
The toilet overflows and raw sewage pours out all over your bathroom floor as noxious fumes fill the home in a vomit-inducing cloud of agony and despair.
Now, do you think such an occurrence will increase or decrease the likelihood that this tenant will renew their lease a year from now?
Such issues can poison what I call the second impression. The first impression is when a prospect views the property to either apply to rent or make an offer to buy. The second is when they move in or do their inspections. That second impression will go a long way in setting the tone for the landlord/tenant relationship or getting the property through the inspection period unscathed.
It’s amazing how many little things get missed if you don’t go through and check on each detail. And sometimes, even big things can get missed. We’ve seen this over and over again. The more diligent we are in finishing a project the right way, the fewer problems we have renting it, or with the tenant after they move in.
Not doing a sufficient quality check can cause all sorts of problems with tenants and maintenance, but it can also cause issues when flipping. If a whole host of problems pop up on an inspection report, you better believe you are about to get a nasty resolution of unacceptable condition or perhaps even a cancellation.
This is why it’s not just good enough to do proper due diligence and budgeting. Nor is it good enough to put together thorough scopes of work, find quality contractors or employees, and diligently oversee construction. As Robin Sharma puts it, “Starting strong is good; finishing strong is epic.”
This is where the punch-out and quality checks come in.
A Word on Checklists
I would highly recommend that anyone in real estate, or any business for that matter, pick up a copy of The Checklist Manifesto by Atul Gawande. It describes in meticulous detail how important it is to create systems and well, checklists, and follow through with them consistently.
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I still feel so silly it took me so long to think quality checking the work done by contractors was a step that needed to take place. All this stuff feels so obvious in hindsight but for some reason just about everyone goes through the learning process of making the mistake first.