Steve Rozenberg is the VP of Investor Education with Mynd Property Management, and he asked Brandon Graham, the Portfolio Manager of Phoenix Operations with Mynd to talk about some of the common issues and challenges that face Phoenix real estate investors and landlords.
Today, we’re talking about the vaping trend, and how it affects your rental property in Phoenix. Vaping isn’t the only type of smoking that can have a detrimental effect on the value of your home. Cigarette smoke and marijuana is also danger to home values, and you need to know how to handle these things with tenants and their guests.
Smoking Bans with Phoenix Rental Property
Can you ban vaping or marijuana smoking in a rental property?
Yes, you can. It’s equivalent to a smoking ban. The challenge is in detecting when that ban has been violated at your property.
Vaping has become more popular in the last few years, and it’s a growing concern for landlords and property owners. Vaping and cigarette smoke and marijuana usage are all concerns, but vaping is especially complex because you can’t always smell it the same way you can smell cigarettes or marijuana.
The law allows you to prohibit any kind of smoking inside your rental home or even anywhere on your property. While it’s almost impossible to prevent it 100 percent of the time because you’re not there watching your tenants, you can control what goes on in your home and at your property by writing this smoking ban into your lease agreements.
Implement Actionable Penalties for Violations
Start by including a clause in your lease agreement that states there is no smoking in or at the property, including marijuana. The lease should also indicate what the penalties are if a tenant violates that rule. You’re putting this in place to protect your investment and keep its value high. When you have tenants or guests of the tenants smoking in the property, your value decreases. It takes a lot of work to get that smell out. Penalties should deter tenants from violating this part of the lease.
It’s not too common to have tenants violate this part of the lease agreement. Good tenants put down a security deposit when they move in, and they want to get it back when they move out. So, they should refrain from smoking.
This risk can also be managed with a strict screening and leasing process. Actionable consequences will help you hold your tenants accountable.
Detecting Damage at a Phoenix Rental Property
The smell is easy to detect when tenants have smoked cigarettes or marijuana. When this is determined during an inspection, you’ll document the evidence and then treat the property with ozone treatments, repainting, and vent cleaning. Then, you’ll charge the resident’s security deposit for all of those costs.
Vaping is more difficult to determine, and you won’t automatically smell it. This is unfortunate because the debris that’s being left behind will still cause damage to the value of your asset. Vaping in a property does have potential hazards. That residue can get into the ceiling and all over the walls. You may not see it or smell it, but that cloud of smoke has to go somewhere. All of that gathering debris will be an expense. There aren’t any detection kits on the market currently, but for now, you’ll have to look for any physical signs that might show up during an inspection. Anything that isn’t part of a property’s normal wear and tear can be deducted.
Preventing Damage to Your Phoenix Investment Property
A lot of these challenges can be avoided if you take these important steps:
- Select the right tenant. Make sure you’re paying attention to the tenants who apply, and screen them according to a consistent set of standards and guidelines.
- Set expectations with your tenants. When they are preparing to move in and signing the lease, highlight the areas of greatest concern. Your tenants should understand and agree to your smoking ban.
- Hire a professional Phoenix property management company. This will ensure you have an experienced team of professionals to meet all the challenges and select the right tenants.
- Conduct periodic inspections of your rental property. Don’t let your investment property sit without any attention. Get inside the home and make sure there isn’t any kind of smoking going on.
Explain your standards to your tenants, set the criteria for how the property will be maintained, and always verify that the tenants are performing the way you expect them to.
Trust, but verify.
We’re always surprised when an owner tells us he or she has had the same tenant in place for five years and they have been performing well and paying on time, so there’s been no need to visit the property or take a look around. If you never go to the property, you’re taking on a lot of risk.
How do you know the home is being cared for and maintained? At Mynd, we get inside every property about four months before a lease ends. That’s how we know if we want to renew the tenant’s lease agreement and keep them for as long as possible or if we want them to move on.
Running your Phoenix rental home like a business takes a lot of work and attention. You wouldn’t leave a bank account alone for five years and not look at it. If you don’t inspect your property and pay attention to the lease enforcement, you’re golfing at night. You have no idea where that ball is going or what your property is doing.
Properties naturally depreciate. We can help you actively maintain it and maximize its value. Contact us at Mynd Property Management to talk more about how we can help you effectively manage your Phoenix rental property.
You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.