As a property manager in Charlotte for nine years, I have seen many rental houses come and go; some rented quickly and some didn’t. Most of the houses weren’t perfect, but almost all of the houses that were rented quickly had one thing in common: they were very clean. And you might be surprised how many really dirty houses are on the rental market!
“Cleanliness is next to godliness” is the popular axiom, and it’s also a huge differentiator in the rental home business. The number 1 secret to renting a house fast is to make sure it is really clean. That’s all. If you can get someone to look inside the house and it’s really clean, the closing rate is 80% to 90%. I’m not kidding. If cleaning doesn’t meet tenant expectations, that’s what property managers hear about the most.
But how clean is clean? Is an initial $150 cleaning job enough or is a $600 cleaning job necessary (where a large crew of maids touch every surface and one could ice skate on the floors after eating on them)? That is a difficult question. Every tenant has a different idea of what “clean” is.
Rental homes are all about ROI. So the real question is, “Is $600 a good investment that will get you a higher rental rate?” Most homeowners won’t be happy paying $600 to clean a house they don’t live in, when they would never pay $600 to clean a house they live in. But is it smart to do it anyway?
Renting houses is not rocket science. It is about the value proposition that each house makes against the other houses on the market. For example, if you go to the supermarket and see that regular bread costs $1 a loaf and whole wheat bread costs $2, which do you choose? If you don’t see the value in paying an extra $1 for whole wheat, then you’ll pass on and buy the regular bread. If a clean house rents for $1,500 and a dirty house rents for $1,400, which do you choose? It’s that easy. And many people will pay more for the value of a really clean house.
Before you landlords have a heart attack and think it’s necessary to get a $600 cleaning job on all their vacant rentals, I warn you, you’re not always careful. The higher the value of the house, the better the cleaning job should be. This also works from an ROI perspective. If a really clean house allows the market to charge an extra 5% per month rent (which is not unreasonable), then:
1. The $1,000/month house becomes a $1,050.00/month house. We have a one year lease, that’s an additional $600 a year. A $600 cleanup is probably not guaranteed (0% ROI), but a $300 cleanup would generate a good ROI (100%).
2. A $2,000/month house becomes a $2,100/month house. That’s an additional $1,200 a year. A $600 cleanup job would be justified if it produced a 100% ROI.
In addition to the empirical dollar ROI numbers, there are also soft numbers to consider. Clean tenants who take care of rental houses like to move into really clean rental houses. And guess what? Most of them are turned off by dirty houses and won’t move into them. Renters who are willing to move into dirty houses are generally not as concerned about the condition of the houses as clean renters are. So what kind of tenant do you want to attract to your rental home?
With rental houses, ROI is king. And a $600 cleaning fee may push you further into the black!
