In this week’s episode, Podcast Host, Andrew Schultz, explores the topic of cleaning fees for rental properties including a discussion around how to charge and price out the services.
My oh my! If you’ve recently discovered asbestos on your property, you might be wondering how to handle the situation, especially if you have a tenant currently living in the rental. No worries, we’ve got you covered!
Last, but not least, we’ll chat about tenants that want to use property for office-use. Are there specific code enforcements when running a business on the property that landlords should know about? Find out in our latest podcast.
Show Transcription:
Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the RentPrep for Landlords podcast. This is episode number 370, and I’m your host, Andrew Schultz. On today’s episode, we’re gonna be talking about rental cleaning fees, how to deal with asbestos in your rental property, and using a rental as an office. We’ll get to all that right after this
Voice Over: (00:19)
Welcome to the Rent Prep for Landlords podcast. Now your host, Andrew Schultz.
Andrew Schultz: (00:27)
Before we jump into today’s episode, don’t forget to check out the RentPrep for Landlords Facebook Group. It’s a great free resource for you to network with housing providers from around the country. And if you have a question or a situation that you’ve never dealt with, there are over 12,500 members. Chances are someone in the group has been there before and can lend a helping hand we’re pushing for 13,000 members. So if you haven’t checked it out yet, do that today over at facebook.com/groups/rentprep. Don’t forget to mention the podcast when answering the questions. So we know how you found us!
Voice Over: (01:01)
Forum quorum, where we scour the internet for ridiculous posts from landlords and tenants.
Cleaning Fees For Rental Property
Andrew Schultz: (01:10)
This week’s forum quorum comes to us via the Rent Prep for Landlords Facebook group. To most people here have a cleaning fee that comes out of the deposit after move out. I’ve had a $100 cleaning fee for about 10 years. And I was thinking about upping the charge. What do some of you charge? What do you think? So this is an interesting question because at least in my opinion, in my experiences, there are probably more complaints about cleaning charges that move out from tenants than any other complaint that we receive when it comes to security deposit dispositions. Some tenants are gonna argue those damages, but they will usually back down pretty quickly once they realize that they’re in the wrong, but it just seems like every single tenant that catches a cleaning charge at move out always seems to try to argue it. Uh, I think part of the reason for this is that clean is a very subjective term.
How “Clean” Should A Tenant Leave A Rental?
Andrew Schultz: (01:55)
What a tenant may call broom clean may be very different than what you or I would consider broom clean. And then there’s definitely D levels of clean on top of that. So for instance, my woodshop doesn’t need to be as clean as my house or my office. There’s a big difference between broom clean, which is typically what we expect to see when we get a unit back, and hotel clean, which is typically how we like to see our units when we turn ’em over. And when we give them to a tenant for move in. So we do have different types of cleaning, different levels of cleaning, and different expectations of clean, depending on what it is that we’re doing. We do have cleaning charges in our lease for just general cleaning on a per room basis. But we also have extra charges in our lease for things like smoking in the apartment or candle burning in the apartment, which could also require deeper cleaning and at a minimum, um, due to the tar and the sot buildup.
When property damages happen and require more attention.
Andrew Schultz: (02:47)
But it may actually cause actual damages to the unit that require repair. For instance, we had one tenant that burned so many candles. There was so much sot buildup that we ended up having to do. I think it was three coats of oil-based paint before we could go over it with any sort of, latex paint to actually get the unit prep the, we couldn’t scrub the sot. It was a nasty situation the tenant was charged an extensive amount because of the damage to the apartment as a result of all the candles that they were burning in the apartment. So we do also specify in our lease what the tenant has to clean at the time of move out. So for instance, our lease specifically calls out, cleaning the windows, cleaning inside, outside, and under all appliances. You’d be shocked at how many times tenants forget that you can pull a stove refrigerator out to clean the sides of it or to clean underneath of it inside and outside of cabinets.
Reminding Tenants Of Cleaning Terms In Lease
Andrew Schultz: (03:38)
That’s one. And I know that that’s commonly missed by tenants because I always, always, always find things left inside of cabinets, which tells me that they didn’t go through and wipe out the outside or the inside and outside of their cabinets. We also require our tenants to have carpet steam cleaned at the time of move out and to provide the receipt, showing that that service was completed, that’s in our lease. And we also provide a reminder of all these things at the time that the tenant provides are notice that they’re moving out. So what I’m seeing here is that none of this should come to a shock to the tenant when they go to move out that they’re being charged for cleaning it’s in our lease. We also remind them that they need to clean when they give us a move-out notice. So if they choose not to clean at that point, they’re gonna get hit with a cleaning fee.
What To Keep In Mind When Setting A Price
Andrew Schultz: (04:20)
It’s that simple. So going back to the actual cleaning charge, you mentioned in your question that you’re currently only charging about a hundred dollars. I personally think that that is way, way, way too low. I’m not sure if you’re doing the cleaning yourself or if you are bringing someone in, but if you’re bringing someone in and you’re paying them a hundred dollars, by the time you factor in the cost of the cleaning chemicals, you know, paper towels or whatever, that cleaner’s probably not gonna do a real solid job, cause they’re not really making anything on that job to be there for a hundred bucks, you should be looking to cover your expenses here and in turn, deduct those expenses from your tenants’ deposit. If they did leave the place dirty, but as always check your state laws to ensure that whatever you’re deducting you are deducting it correctly, particularly com when it comes to DIY labor, if you are gonna do that, cleaning yourself many states do have restrictions on what you can charge. If you are the one completing the labor. Um, there are some workarounds obviously, but just understand what it is that you are getting yourself into when you start making those cleaning deductions from a security deposit.
Voice Over: (05:20)
Water cool cooler wisdom, expert advice from real estate pros.
Asbestos In Rental Property
Andrew Schultz: (05:29)
Our water cooler wisdom this week, both come to us via the landlord, subreddit our first one deals with asbestos. What happens if you think you might have asbestos inside of one of your rental units and what happens when one of your tenants brings that concern to you? We’re gonna go ahead and jump right in here. One of my tenants recently reached out to me because their ceiling is crumbling or peeling away, and they wanted to make sure that it didn’t contain asbestos. I’ve never had an issue with this in the past, but my house was built in 1905. So there’s definitely a possibility that it contains asbestos. What is my best course of action here? Should I test the ceiling for asbestos? And if it does contain asbestos, do I need to fix it? They are planning to move out in April of 2022. So I was hoping to wait until then to remodel the unit.
Andrew Schultz: (06:11)
This is a bit of a tough one. I’m gonna preface this by saying that my knowledge on asbestos kind of limited, and I’m not an asbestos tester. I’m not an asbestos abatement contractor or anything of the sort. So I’ll be speaking in some generalities here, but we do see a fair amount of asbestos here in the Buffalo area due to the age of our housing stock. Uh, and we also have a fair amount of asbestos removed from homes over the years, just doing our normal course of pro property management. We’ve had a fair amount of asbestos pulled outhouses over the course of the years. Commonly here, we see it on pipe wraps on boilers, um, or on heat ducts, that’ll contain asbestos. It’s also in a lot of older wiring, older caulking, older window glazing, quite a bit in older building materials. Essentially. We also used to see a lot of it in asbestos shingling, which was commonly used to side houses back in the day and believe it or not, it’s actually very common in older popcorn, textured ceilings, which they’re pretty common in a lot of houses, at least in this area.
Testing For Asbestos Is Crucial
Andrew Schultz: (07:10)
And I’m sure across the country, if you look up and you see a textured ceiling, there may be some level of asbestos in that, depending on when it was installed. So I think the first question here, um, that I would have would be what’s the root cause of the ceiling crumbling or peeling away in the first place, because ultimately if you have a water leak or you have a structural issue, if there’s some sort of an underlying issue that needs to be dealt with right alongside this concern, or possibly even before this concern, but that’s way outside this open the question at hand here. So basically you’ve been asked by a tenant whether or not their ceiling, which is damaged is, uh, contains asbestos. The only way to truly answer that question is to have the damaged area tested. My recommendation would be to bring in someone licensed to test that area and make that determination.
Andrew Schultz: (07:56)
However, there are at-home testing kits available. In the meantime, it may be a good idea to see what can be done to temporarily encapsulate that area without further disturbing it until you get your test results back, you do still have tenants in the unit. Uh, so this needs to be done with some care and possibly by someone licensed, who knows what they’re doing though. Again, in some states you may be able to do the removal yourself. Uh, and again, that may vary depending on whether you are the owner occupant, I E it’s your personal residence, or if you’re renting the unit out. So make sure you do your research as you may have a higher standard on a rental property than you do on your personal home. For instance, the nice thing about asbestos is that generally, it doesn’t pose much of a health risk, as long as it’s intact, once it becomes friable or crumbly, it’ll start to create dust, which obviously that’s bad once it gets into your lungs.
Andrew Schultz: (08:47)
So that’s what we’re trying to avoid is asbestos becoming crumbly, becoming fryable is the term they use. And I believe I’m pronouncing that correctly. Um, but once it gets to that point where it’s starting to become dust, that’s when it’s a concern. So the main concern here is preventing that dust from getting airborne. You mentioned that the tenants are leaving in April, which is only a couple months away. Is this a situation where you can get by with a piece of drywall over the impacted area to encapsulate it, those tenants move, uh, or are the tenants in a situation where they may be able to, or willing to move a little bit earlier so that you can get in there to do this work? If so, either of those options may be in everyone’s best interest. That’ll get you by for now, at least until the unit is empty and the work can be addressed.
Different Methods For Handling Asbestos
Andrew Schultz: (09:32)
Um, there’s generally speaking a couple of different methods for handling asbestos abatement encapsulation, which I had just mentioned, which is complete coverage of the asbestos or outright removal of the asbestos are the two most common that I see. And again, I cannot emphasize this enough. If you intend on a DIY, project like this, please do your research so that you’re not getting yourself into a bigger mess. If you need a professional, bring in a professional. I understand that they come at a cost, but I guarantee you, the cost of a professional is a lot less than the cost of doing something like this incorrectly and winding up with someone getting sick, or you being brought into a lawsuit or something silly like that air on the side of caution with something like this, asbestos and lead paint are hot button issues in most areas country right now, especially the areas of the country with aging housing stock.
Tenant Running Business From Rental Property
Andrew Schultz: (10:20)
So mishandling it could be very, very risky for you as a property owner. Our second water-cooler wisdom is on renting a house out or renting an apartment out for use as a business location for use as an office location. Let’s go jump right in here. I have tenants who have applied for an apartment with the purpose of using the property for a business. It’s a large single family home in a decent area of town. It sounds like it’s an older couple and they both work from home and want to rent the house for use of their business. Um, they have one employee, but it doesn’t sound like the type of business that customers would ever be a site for. I’m still worried if the neighbors or the city would have an issue with this, or if this could cause problems for you down the line, what are your thoughts?
Know The Local & State Laws
Andrew Schultz: (11:04)
To me, it sounds more risky than just going the normal route. As far as tenant selection goes, there’s a lot to unpack here. Um, there really is. Yes. The last comment that you made in your, in your question was it seems like this is more risk than just going the normal route with a standard tenant. And yeah, there probably is going to be more risk. If you go this route then if you were to rent to a standard tenant, that’s just gonna live in the property. Um, as a normal average everyday person, before we get into whether or not you should do this, I think we probably have to talk about whether or not and do it. So depending on the type of business, depending on the type of zoning for the property, you may or may not be able to operate an at-home business from that residence.
Andrew Schultz: (11:47)
So you’re gonna wanna start by checking to see what your friendly neighborhood government has to say about you, doing what you want with the land that you already own. Uh, realistically, your chances of getting caught. If it’s not a high-traffic situation, it’s gonna be pretty minimal. Chances are the neighbors and local government probably are gonna have no idea if it’s a low traffic situation where people are just sitting there working at computers or something like that. Uh, but anyway, I digress when I’m talking about an at-home business. In this instance, I’m not talking about somebody who’s just working at home for an employer. I think that at this point, we all either have worked at home or know someone who’s been working at home during the pandemic. And I think that we all understand that that’s not what I mean when I’m saying an at-home business, that’s simply someone who’s working at home.
Determine The Type Of Business
Andrew Schultz: (12:32)
You’re at-home business may look very, very similar to someone who’s just working from home. If that’s the case, I really don’t see an issue with that business being run from a residence. Um, we’ll dig more into that here in just a minute, but what I’m really referring to when I’m talking about someone who owns and operates a business from their home is someone who has your typical think of like your common side gigs that you see out there. Anything from selling candles to cutting hair, fixing computers, woodworking, wrenching on cars. You know, there’s a ton of different things that people do for side money that they do from their homes. Even just from that list, you can tell that there are some businesses that are gonna be much more suited to running from home versus a commercial space. I hair cutting. Yeah. You’re probably gonna get away with cutting hair at your house, putting a lift in your garage and doing oil changes in the yard.
Andrew Schultz: (13:20)
You probably are not gonna get away with that. If you live, you know, in suburbia on a cul-de-sac sorry to say it, most people just don’t wanna see that. So I think that the type of business is very, very relevant here. Uh, the amount of traffic coming in and out of the house is definitely going to be a concern, not just for you in terms of wear and tear on the property, but also the neighbor, Karen is gonna complain if she’s inconvenienced in the slightest and that’s when you’re going to wind up having, you know, your tenants are gonna get harassed. You may wind up with police intervention because Karen doesn’t wanna be inconvenienced. You may wind up with a building code enforcement officer showing up, you know, watching the amount of traffic coming in. That’s part of how I would look at this to see if this might be something that would be a viable business to work from a home, uh, something that’s kind of tangentially related, but something that I think will become more and more common in the coming years is people renting out houses to have a place to do from, um, you’re seeing it.
Andrew Schultz: (14:17)
Uh, it’s a very common practice. I shouldn’t say a very common practice, but it’s becoming a more common practice in the world of eSports where teams will all live in the same house together so that they can get on and practice and live together. And it helps them to kind of build their team, build their own little community, right inside their home. You’re also starting to see it with some content creators on YouTube, TikTok, whatever other platforms are out there. These content houses are starting to become a thing. It’s giving these people a place where they can meet and where they can collaborate. And it’s an interesting way of doing it. And it’s certainly a lot cheaper than going out and renting a great big commercial office space or something like that, which may be out of reach for some of these content producers that are early on in their careers.
Andrew Schultz: (15:00)
If you will. Uh, again, there’s a big difference between renting a house to produce content on cooking, where everything is inside. Nobody really knows what’s going on inside versus producing content. That’s gonna have an impact on the property or have an impact on the neighbors like filling your swimming pool full of foam. Like what mark Rober did a couple years ago. So over the years, my opinions on renting to someone looking to run a home base business have definitely changed. I used to be firm in the no camp on this. And obviously things are very, very different now with how much tech has advanced, um, the different at-home businesses that are viable and a slew of other factors. I think if you screen your tenants well and understand what it is that you are doing, what the risk is in the situation, the type of business that’s gonna be run from the home.
Andrew Schultz: (15:49)
At that point, you can decide whether or not that risk is right for you as the property owner. Should you run a background, check on your tenants, spouse. The answer may surprise you check out our latest guide at rentprep.com/blog today. For more information that pretty much wraps things up for this week’s episode of the Rent Prep for Landlord’s podcast. Thank you all so much for listening. We Tru do appreciate it. Our goal with the podcast is to help as many people as possible make educated decisions when it comes to real estate, and you can help us to reach our goal. If you heard anything in this week’s episode or any other episode that will help someone, you know, please do us a favor and share it with them. If you’re looking to get in contact with me, I can be reached over at whatsdrewupto.com from there, you’ll find links to everything going on with me over at Own Buffalo, as well as other projects we’re working on, we’ve just launched a free investment property deal analyzer, which is available over on that website.
Andrew Schultz: (16:43)
Whatsdrewupto.com. It’s truly free, no obligation whatsoever. There’s also a companion video to teach you how I analyze my rental property deals and how to use our analyzing tool. If you’re looking for top-tier tenant screening services, head on over to rentprep.com, there are multiple products to choose from including a tenant-paid option. If you’re over 50 doors, ask about the enterprise level programs and pricing. I’ve been an enterprise user of Rent Prep for years now, and it’s definitely changed the way that we screen our tenants. Check that out today, over at rentprep.com. Again, thank you all so much for listening. We’ll be back in two weeks with an all-new episode you won’t wanna miss. until then I’m Andrew Schultz with ownbuffalo.com for rent prep.com and we’ll talk to you soon.
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