Getting a home rent ready can be daunting if you don’t know where to focus your efforts.  Which repairs should you prioritize?  What can you do to make your home tenant-proof?  What are the tax implications of all these expenses?

It can be overwhelming but I have a system that can help.

Whether you are an accidental landlord getting your home rent ready or you are a real estate investor who just scored your first rental property, my system will help you manage the process.

It’s even helped me streamline my turnovers and avoid over-investing in unnecessary repairs and improvements. 

I will share my rent ready system with you in this article.

Specifically, I will show you:

• What to look for during your Walk-Through (Rent-Ready Checklist)
• How to create a Punch List Priority Matrix
• Steps you can take to tenant-proof your home
• How to maximize tax deductions in your first year of operation

Note that this article contains Amazon Affiliate links to products I think you will find helpful. This means I may earn a commission, at no extra cost to you, if you purchase anything through a link and it helps me continue to bring you useful articles like this one. Thanks for your support!

Assessing Property Condition – The Rent Ready Walkthrough

The first step in the process of making a home rent ready is to conduct a thorough assessment of the property’s condition.

The condition of your soon-to-be rental property makes a big difference.  It will significantly impact how much rent you can receive as well as how long it takes to rent. 

You need to assess how well your home compares to others on the market.  And if this was your personal home, you need to be as unbiased as possible.  You may have become used to your home’s quirks and faults but a prospective tenant will spot them right away and may be turned off.

Here is a room-by-room list of what to look for during a property walkthrough.

Kitchen Walkthrough

Refrigerator / Freezer	Interior is free from stains, grime, hair, etc. Shelves are stable and clean Temperature is sufficient Light is working Exterior is free from stains, grime, hair, etc. (on top too!) Door handles are firm Note the age, model, and serial number for future reference Note any scratches and dents
Stove / Oven	Test all burners / heating elements Test oven and broil function Test oven light Clean or replace burner grates and drip pans Interior is free from grease stains Tip – Use a heavy duty oven cleaner Clean or replace racks Note the age, model, and serial number for future reference Note any exterior scratches and dents
Dishwasher	Run wash cycle to ensure it properly drains Ensure spinners are working and free from debris Test all functions and buttons Filter is clean and free from buildup Replace broken tines or racks Edges around door seal are clean Note the age, model, and serial number for future reference Note any exterior scratches and dents Tip – Use a dishwasher cleaner to clean the interior parts
Microwave	Heat a cup of water for 60 seconds (near boil) Interior is free from stains, grime, etc. Replace broken turntable or racks Test all buttons Filters are free from grease Note the age, model, and serial number for future reference Note any exterior scratches and dents
Cabinets / Drawers	Interior is free from debris and stains Tip – Use a removable shelf paper to tenant-proof cabinets Doors are free from grease and grime Tip – Use a citrus cleaner for tough grease Handles are clean and secure Doors close properly Note any exterior scratches and wear
Countertop	Clean with appropriate cleaner Inspect for any cracks, chips, and burns TIP – Seal natural stone and wood countertops before renting
Garbage Disposal	Disposal runs smoothly and without obstructions
Sink	Sink is free from leaks underneath Caulking is in tact Hardware works properly and without leaking gaskets Sink drains easily Note any chips and scratches
Exhaust Fan	Fan and light function properly Fan is vented to exterior if applicable Filters are clean of grease
Under Sink Cabinet	Inspect for any signs of leak or mold Cabinet closes easily Hardware is secure Pull out racks function smoothly
Floors	Grout is clean and in tact Note any tile chips and cracks Note any damaged wood areas
GFCI outlets	GFCI outlets shut off when tripped
Fire Extinguisher	Kitchen has proper fire extinguisher Extinguisher is up to date

Bathroom Walkthrough

Vanity	Countertop is clean and note any scratches Cabinets are free from debris Lights are working and no broken bulbs
Sink	Sink drains properly Drain stopper fully engages No drips from faucet Caulk is clean and in tact Note any scratches or chips
Under Sink Cabinet	Inspect for any signs of leak or mold Cabinet closes easily Hardware is secure Pull out racks function smoothly
Exhaust Fan	Fan and light function properly Fan is vented to exterior Filters are clean of grease
Toilet	Toilet is clean Toilet seat is secure Toilet flushes and refills quickly Flush handle works and doesn’t stay “open” Inspect underneath and around for signs of leak Shut off valve works with no leaks
Floors	Grout is clean and in tact Note any tile chips and cracks Note any damaged areas
GFCI outlets	GFCI outlets shut off when tripped
Medicine Cabinet	Opens and closes easily Shelves in tact and not chipped Hardware is secure
Towel Racks / Hardware	All hardware is tightly secured to the wall
Shower / Tub	All tile and grout are in tact and clean No sign of mold Hot and cold water works Sufficient water pressure Drains quickly No signs of leaks or drips Shower head is free from minerals Surfaces are free from hard water stains
Odor	Bathroom is free from musty odors

Interior Rooms Walkthrough

Walls	Clean and free from marks, nails, and holes No chipped paint or plaster No signs of cracks or bad drywall seams
Ceilings	No visible signs of stains (water damage) No cobwebs No hooks
Closets	Interior clean and free of debris Doors open and close easily Closet rod and shelves are secure Lights are working properly
Floors	Carpet is clean Carpet is free of stains, burns, and ripples Wood floor boards are clean and grime-free No missing or chipped tile Note any scratches or marks
Light Fixtures	Functioning properly No missing bulbs No buzzing sounds
Outlets & Switches	Clean and free from marks Switches all function properly Test each outlet to make sure it is live No visible signs of burn or fire damage
Vents and Baseboards	Clean and free from dust Vents easily open and close
Doors	Door stops in place No hinge squeaks Closes properly without force Hardware is secure and easy to use Caulk and insulation in tact Trim is clean and dust-free Keys available if applicable
Window Treatments	Blinds easily raise and lower No broken slats Curtain rods are secure
Ceiling fans	Blades are clean and dust free No excessive wobbling Pull chain works easily Fan and lights function properly
Windows	Windows and sash are clean Window locks easily Window doesn’t “fog” (broken seal) Opens and closes easily Screens are undamaged and clean No broken or cracked windows Caulk is clean and in tact

Utilities & Miscellaneous Walkthrough

Heating	Heater cycles on and off appropriately Ductwork and vents in good condition Sufficient air flow (forced air) Flue properly vented Expansion tank filled with air (boiler heaters) Pilot light is operating Vents are free from dust Thermostat is functioning properly Clean air filters installed
Central Air Conditioning	Condenser unit free from leaves and debris No bent fins on condenser unit New filter in air handler unit Condensate line free from obstructions Condensate line drains to exterior of home
Water Heater	No visible signs of leaks or corrosion Operates at acceptable temperature range (118 – 125˚ F) Flue properly vented Adequate storage for house capacity
Sump Pump	Pump engages when float rises Water drains quickly
Laundry Room	Washer / Dryer functioning properly No visible water damage Water shut off valves close easily, no leaks No bulging or damaged hoses Vent is free from excessive lint
Fire Place	Façade free from smoke stains (not vented properly) Damper opens and closes easily Exterior vent is screened off No evidence of nests in flue Flue lining is in tact No loose or cracked tiles
Stairs & Hand Rails	Handrails are securely fastened Stairs are solid with no give Railings are solid and secure
Smoke & CO Detectors	Test button emits a loud siren No chirping sounds Free from dust and paint
Electrical	No visible burn marks on electrical panels Circuit breakers in good working condition and labeled No exposed wires or splices No painted outlets No Knob and Tube wiring
Plumbing	Main shut off valve is visible and closes easily No signs of leaks or corrosion on valves Pipes insulated if exposed to exterior walls Water pressure is adequate but not excessive
Garage	Garage door opens and closes easily Rollers are oiled and track is secure Garage door spring is in good condition Concrete slab is free from oil stains and cracks Automatic door opener remotes working properly Garage door seals are in tact Garage is clear of clutter and debris
Attic / Crawl Space	Clean of debris Sufficient insulation No visible signs of leaks or water damage Vents properly vented to exterior No loose wiring No signs of insects or rodents

Exterior Walkthrough

Siding	Siding is clean and free from stains No paint chipping, loose siding, or rotted wood No loose or missing brick and mortar
Windows	Frame is caulked No signs of rotting No broken glass or screens
Roof	No stains, moss, or discoloration No missing or curling shingles No obvious signs of leaks All joints and flashing are properly sealed
Chimney	Bricks and mortar are in tact Cap is secure Cap is screened to prevent nesting
Gutters	Gutters are clean of debris All gutters are in tact and drain away from house No signs of leaks at seams Securely attached at all points
Deck / Patio	Deck is clean and free from stains No signs of wood rot All deck railings are secure Deck is securely attached to house Deck posts are solid and upright No loose, splintered, or bowed planks Patio slab is clean and free from stains and weeds No cracks or loose bricks/tile
Balcony	Railings are secure and up to code Drain is free from debris Pitched away from house Properly anchored to house
Lighting	All lights and outlets are working Glass is free from dirt and bugs Sconces are properly secured Timer system is functioning properly No improper use of extension cords
Doorbell	It goes “Ding-Dong”
Driveway / Sidewalks	Clean, sealed, free from stains and cracks Pitched away from house

Yard Walkthrough

Lawn	Free from pet or rodent damage No invasive weeds No dead patches
Fence	All slats secured No loose posts Door easily opens, closes and locks
Landscaping	Trees, shrubs are trimmed Retaining wall is sturdy and not leaning
Sprinkler System	Sprinkler in good working condition No buried or broken sprinkler heads Not spraying house or structures

How To Prioritize Rent Ready Repairs That Add Value

Now that you have your punch list (also called a make-ready list), you need to decide which rent ready repairs you must make versus which rental repairs don’t add any value or aren’t necessary.

The reality is that no home makes a perfect rental.  Your list will be long. It will include things that are absolutely necessary and things that are nice-to-do’s. However, you don’t want to over-invest in getting ready to rent your home.

Assign rough dollar figures for every item on your punch list.  How much will it cost to address all the issues you found?  Chances are it would be cost prohibitive.

So how do you know which ones to tackle?

My Punch List Priority Matrix can help.

Punch List Priority Matrix

I like to prioritize my punch list in a 2 x 2 matrix like the one below.

On the vertical axis is Impact.  This is my estimate of the relative impact of rent ready projects on a potential renter’s desire to rent my property.  In other words, will a renter value this?

On the horizontal axis is Investment.  This is an estimate of the relative investment required to complete the project.  Don’t forget to include your time investment as well dollar cost.

Here’s how an example Punch List Priority Matrix filled in.

Now let’s look at each quadrant.

High Impact and Low Investment

You should definitely do these projects.  These rent ready projects will add value to your tenants in the form of a rental that looks good and is free of nuisances like leaky faucets.

High Impact and High Investment

Consider these repairs if you need to do any of these projects to make your home more competitive.  These projects often pay for themselves in the form of lower turnover and vacancy rates but can take a while to payback.

Low Impact and Low Investment

These are repairs that add little to no rental value but don’t cost much either.  Often, these can be safety related issues that need to be addressed.  You may need to do projects such as replacing smoke detectors out of safety or legal reasons.  Just get it done.

Low Impact and High Investment

These are usually big ticket deferred maintenance items. Evaluate these projects on a case-by-case basis.  Avoid them if possible or defer them until necessary.  Do them if they will address a potential safety issue or make your life easier as a landlord down the road. 

For example, It is often better to replace a water heater that is close to the end of its useful life than to deal with a major issue when a tenant is in place.

Tenant-Proofing Your Property

My first tip for new landlords in my Top 50 Tips is to tenant proof your home.

It’s impossible to make your home totally tenant proof. However, there are some steps you can take to minimize the damage and expense from turnovers when making your home rent ready.

Floors

I like to use hardwoods in my rentals.  This goes against the advice of most landlords but I think It has a much nicer look and is what my target renter is expecting. 

Laminates look and feel cheap.  Carpets collect odors and require cleaning every turnover whereas hardwoods only need to be refinished about every 5 years or so. 

Here are a few tips when it comes to flooring in rentals.

• Avoid engineered hardwoods with grooves in high traffic areas.  They will collect grime that will be impossible to clean out.
• Use carpet runners in high traffic hallways if you want to minimize scuffs and scratches.  
• If you live in a condo, you may be required to have a certain percentage of carpet to dampen sounds.  You can buy a few area rugs to meet this requirement.
• Use tile or vinyl planks in kitchens and bathrooms to avoid water damage and make easy repairs when needed.
• Brian Davis of Spark Rental suggests including a shoe rack in your entryway to subtly remind tenants to protect the floors

Kitchen

The kitchen is probably the room that sees the most wear and tear so it’s important to keep this in mind.  You want to avoid fragile, high maintenance finishes.  This can include granite countertops which need to be sealed every 6 months or stainless steel appliances which highlight every imperfection.

However, depending on your market, your renters may expect high-end items.  If that’s the case then you need to opt for more durable finishes.  For example, choose quartz countertops which don’t need to be sealed and can withstand higher heat than granite. A slate finish on your appliances might also fare better over the long run.

If you have a lower end home, you can opt for laminate countertops instead.  These will last the longest and can withstand most normal wear and tear.

Here’s a list of some items to avoid in a rental kitchen:

• Sprayer hoses in sinks (they tend to break easy)
• Porcelain sinks (chips easy with sharp objects)
• Avoid cheap faucets which tend to break easy
• Butcher block or Marble countertops (high maintenance)
• Engineered hardwood floors (collects grime in between grooves)
• Trash compactor (one more thing to break)
• Cheap cabinets (tenants will tear them apart quickly)
• Expensive cabinets (tenants will eventually tear them apart)

See 9 Smart Ways To Save On A Rental Kitchen Remodel for more tips.

Walls and Doors

Following these simple tips below will help protect your walls and make turnovers faster and less expensive.

Paint

Choose the right paint finish for the right room. 

Use an eggshell finish for the living room and bedrooms. You will be able to clean up small scuffs but it won’t show every imperfection like a semi-gloss finish.  If you have near-perfect walls or want more protection from scuffs then go with a semi-gloss.  A flat ceiling finish is ok for these rooms.

I like to go with a semi-gloss finish in the Kitchen, Bathrooms and Closets.  It stands up to wear and tear better plus it can be washed to remove grease buildup.  This includes the ceilings.

All trim should be in a semi-gloss finish to protect from scuffs.

Doors

Every door should have a door stopper.  I like to install hinge-pin door stops in my rentals.  It protects the doors but stays out of sight. 

Install kick plates on the bottom of entryway doors.  People tend to kick these doors open when their hands are full.  This will save you the trouble of having to refinish the door every few years.

Opt for solid core doors if you can afford it.  They cost more but you won’t have to worry about your tenant putting their fist through it.

Racks and Shelves

Always mount any racks or shelves to a stud.  This will avoid golf-ball sized holes when your tenant’s kid tries to do pull ups on the bathroom towel rack.

Windows

Screens

Choose a screen material that can stand up to wear and tear.  An aluminum screen is best for most windows.

It’s best to use a heavy duty screen material for screen doors. Look for one that is rated for pets. It’s also good for people who try walking through the high visibility ones!

Better yet, remove all screens if possible and replace them with plexiglass.  This tip comes from Mr. Landlord himself.

Window Treatments

Always pre-install window treatments in your rentals.  Never let a tenant do it no matter how handy they claim to be.  This will ensure they are secure and your walls won’t be ruined.

Avoid cheap blinds or vertical blinds.  They will get destroyed fast.  I like to use blackout shades in bedrooms.  They help create a darker, quieter sleeping environment for tenants.  You can use a similar type blind in living areas or install curtains instead.

Other Tenant-Proofing Tips

Here are a few other things you can do to make your life as a future landlord much easier.

• Remove or shorten the chains on ceiling fans.  Kids and adults both like to rip these out.
• Use dark grout colors to hide stains or go with a very narrow grout line
• Switch to LED or CFL light bulbs to save yourself the hassle later
• Use a dual fan and vent in the bathrooms.  Wire them to one switch so the vent is always on when the tenant showers.
• Replace the flush mechanism with a new Fluidmaster Universal one
• Install contact paper under sinks to avoid water stains and damage
• Simplify landscaping by installing more hardscaping, mulch, rocks, etc.  Avoid high maintenance plants, trees, and shrubs like magnolias and weeping willows for example.

Tax Treatment Of Pre-Rental Costs

One of the biggest benefits of owning a rental property is the tax deductions.  However, tax treatment of expenses incurred when getting a house rent ready can be tricky.

A little bit of pre-planning can save you a lot of taxes in your first year which is often a make-or-break period for new landlords.

There are two factors that determine the proper tax treatment for expenses incurred when getting a home ready to be rented.

1 – Placed In Service Date (Rent Ready Date)

The date your rental is placed into service is the first factor in determining tax treatment.  The placed in service date marks an important milestone for tax purposes.  Any operating expenses incurred prior to a rental property being placed in service must be capitalized.  After that date, they can be expensed.

A property is deemed to be placed in service when it is first “placed in a condition or state of readiness and availability for a specifically assigned function.” See IRS Pub 527 for more details (see pg. 6).

For a new landlord, that essentially means when the property is ready to be occupied by a tenant.  Note that the property does not need to actually be rented.  It just needs to be ready for that intended purpose.

PRO TIP – Document the date you placed your rental into service.  Make copies of the listing, document your tenant screening meetings, etc.  You may need to prove the date you placed this property into service later.

Start Up Expenses

So what happens to operating expense incurred before the placed in service date?

Any operating expenses, including repairs and maintenance expenses, incurred before the service date can be capitalized and amortized over 15 years.

The $5,000 Rule

Luckily, you don’t have to wait 15 years to deduct some of these expenses.  Instead, the tax code allows a one-time deduction of up to $5,000 of Start Up expenses.

However, any amount over the $5,000 limit must be amortized over the next 15 years.

The $50,000 Limit Rule

But there is a catch.  This one time deduction is phased out if your start up expenses exceed $50,000.  This phase out is dollar for dollar.

For example, if you incurred $52,000 of start-up costs, then you could only deduct $3,000 in the first year.  The remaining $49,000 would have to be amortized.

Most accidental landlords won’t run in to this limit but it’s important to know that it exists.

2 – Capital vs. Operating Rent Ready Expenses

The second factor in determining tax treatment is the type of expense.

Only operating expenses can be treated as start-up expenses.  In other words, only expenses that would normally qualify for in-year expense treatment can be considered start-up costs.

Capital expenses (any expense incurred to improve the value or longevity of the property) must be added to the cost basis.  This cost basis will then be depreciated proportionately over the next 27.5 years for residential properties.

PRO TIP – Use your Punch List Priority Matrix to do some tax planning that will save you money in your first year of operation.  Hold off on any unnecessary rent ready repairs until after you place your rental into service (when it’s ready to be rented).  These can then be expensed.  Also, limit your start up repairs to $5,000 to take full advantage of the in-year deduction for start-up expenses.

Conclusion

Prioritizing rental repairs is a challenge for many new landlords.  It’s hard to know what needs to be done versus what is nice to do.  It’s easy to get carried away and over-invest in making your home rent ready. 

Using a Punch List Priority Matrix can help you sift through the list to know what repairs will provide real value to your rental business.

As you go through your punch list, be sure to prioritize repairs and improvements that will tenant-proof your rental.  These rent ready repairs will pay for themselves in faster and cheaper turnovers.

You can also use your Punch List Priority Matrix to help you save on taxes in your first year by taking full advantage of the Start-Up tax deduction.

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