Digital Inspections Reduce Property Management Risk: A Cautionary Tale

24 July 2017 Eric Leave a comment Uncategorized

Property management requires diligent record keeping, whether you’re a homeowner renting out a room through Airbnb or a corporation managing multiple residential complexes. How well those records are created, stored and cross-referenced can make or break any business on the scale all the same.

Just ask Sarah Glover, who manages several vacation properties and a few year-round rentals in western Montana. Her clients includes out-of-state corporate investors as well as friends members of her close-knit, small community. Her rental market? Upscale seasonal vacationers, hunting season regulars, year-round renters from all backgrounds and her own peer-to-peer online rental customers, who book weekends at a small guest cabin at the back of her 20-acre wooded property.

“I’ve been doing this for almost twenty years,” said Sarah. “I work with local contractors for maintenance, upgrades, house cleaning and private road maintenance. Our area has its own challenges, and since we’re a relatively small outfit, we’ve relied upon spreadsheets and paper forms for pretty much everything.”

That is, until a disaster caused her firm $60,000 damages when one of her property owners sued for damages.

Before renting out any of her properties, either for a weekend or for a year’s lease, Sarah or one of her two part-time office employees would inventory all appliances, furnishings, and decorations at the location, using one of two form templates she’d made up: “Residential rental” or “Vacation Rental”.

“It was a pain because every property is unique,” said Sarah. “My staff and I would have to remember to include notes on this unit’s hot tub, that unit’s detached get the picture. Some places had fishing gear available for guests to use, and others had lockers to protect homeowners’ sporting goods. Keeping track of it all using Excel, digital files and paper forms was pretty rough, especially when I’d have to send one of my staff out in a hurry to open up for a last-minute booking.”

Sarah prides herself on staying organized but admits that juggling files kept in different locations and in different formats allowed laziness to creep up on her. “Once in a while, every firm misses a pillow that goes missing, and we’ve forgotten to inventory stuff like beach towels more than once. But the biggest ‘fail’ our firm ever experienced was losing a whole storage room full of personal items, including power tools, custom fishing gear and an entire safe of expensive hunting rifles.”

How did this happen? Sarah met with the property owner to take the initial inventory of the property, and learn the layout of the main cabin, grounds, and outbuildings. She took detailed notes on the condition of the property and the new client’s instructions for maintaining water lines, sewer connections, and irrigation. She asked all the right questions and knew that the storage room, with a locked door located behind a bookcase, was off-limits to guests. Only she, her staff and the owner had the key. “There was no reason for our maintenance teams to go inside, since there were no water lines to winterize, and the breaker was located outside the area.”

Therefore, when the homeowners came up to use their property for their end-of-summer vacation and discovered that the storage room had been cleaned out, the blame fell into Sarah’s lap.

“I usually send my staff out to cover pre- and post- rental inspections,” she said. “Each property has its own hard-copy file, but the storage room’s inventory never made it from my clipboard to the file,” she said. “I found it in my ‘New Business’ binder, but never made a clear note on that property’s form to check behind the bookcase in the living room.”

Sarah’s client contract dictated that she would be responsible for inspecting all areas of the house, and since the storage room hadn’t been checked since the beginning of the season, local law enforcement couldn’t prove the property had been stolen by local thieves known to target unoccupied residences. Sarah had to provide the Sheriff’s department with the names of her renters, who resented becoming suspects in the theft investigation. “We really have no idea if any of our renters took advantage of the opportunity, or if someone broke in,” she said. “Anyone can compromise even the best locks, given enough time. We could have reacted sooner if my staff knew to check the room, but they had no idea it even existed.”

Sarah’s business insurance ultimately paid the claim, but she lost repeat business with five rental customers. “The property owner had every right to drop us,” she said. “I had to convince him that my staff and I were on the level, which was awkward, but I did keep his business. But marketing to existing clients costs far less than reaching new ones, and two of those left negative reviews on a vacation home review site because of the hassle,” she said. “Plus, this is a small community, and word got out that a property under my care was burglarized. So I imagine my losses go far beyond the $60,000 claim against my insurance. Deductibles, reputation…everything’s at stake.”

Since then, Sarah started using Simple Inspector. She had identified the major weak links in her system and found that Simple Inspector’s highly adaptable property management platform addressed each of them, and streamlined others she recognized as potential risk multipliers.

1. Cross-device compatibility. Simple Inspector works on and networks with all tablets, smart phones and computers, allowing her staff to input and access multimedia data for pre- and post-occupation inspections, as well as new account data. No more misfiled paper forms, and no need for agents to stop by the office to pick up and verify property files from physical and computer sources.

2. Customizable templates for every situation. Make notations unique to each property, from hidden storage closets to hidden spare keys.

3. Customizable inventory and input fields. Easily keep track of everything from fishing tackle to honor bar contents, existing property damage and new improvements.

4. Instant, shareable reporting. Keep everyone on the same page, from staff to clients, with custom-generated reports.

6. Maintain your contacts. Stay in touch with your property owners and rental customers with integrated contact management.

Sarah was able to recover from her biggest disaster, and with Simple Inspector, she’s streamlined her business and added new properties to her inventory. “It’s worked so well at every level, I wish I could keep it under my hat. Property owners drawn to the popularity of platforms like Airbnb could cut out the middleman—me—if they have a management platform like this one. It’s just so intuitive.”


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