As a property manager in Charlotte for nine years now, I’ve seen a lot of rental homes come and go; some rented quickly and some didn’t. Most homes weren’t perfect, but almost all quick-rent homes had one thing in common: they were really 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 a big differentiator in the home rental industry too. The #1 secret to renting a house fast is to make sure it’s really clean. That’s it. If you can get someone to look inside the house and it’s really clean, the closing rate is 80% to 90%. I am not joking. If cleanliness isn’t meeting tenant expectations, it’s the first thing property managers hear about.
But how clean is it? Is a basic cleaning job of $150 good enough or is a cleaning job of $600 necessary (where every surface is touched by a great team of housekeepers and you can skate on the floors after eating some )? This is a difficult question. Every tenant has a different idea of what is “clean”.
Rental homes are about ROI. So the real question is, “Is $600 a good investment that will yield a higher rental rate?” Most homeowners won’t be happy to pay $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 still smart to do it?
Renting houses is not rocket science. This is the value proposition of each home relative to other homes on the market. For example, if you go to the grocery store and see that regular bread costs $1 a loaf and whole wheat bread costs $2, which one would you choose? If you don’t see the point of paying an extra $1 for whole wheat, you’ll pass and buy the regular bread. If a clean house rents for $1,500 and a dirty house rents for $1,400, which one do you choose? It’s so simple. And many people will pay extra for the value of a truly clean home.
Before homeowners have a heart attack and think it’s necessary to get a $600 cleaning job on all their vacant rental homes, I’ll caution that it’s not always prudent. The higher the value of the house, the more enjoyable the cleaning job should be. It also works from an ROI perspective. If a really clean house allows the market to charge 5% more per month in rent (which is not unreasonable), then:
1. A $1,000/month house becomes a $1,050.00/month house. On a one-year lease, that’s $600 more per year. A $600 cleanup is probably not justified (0% ROI), but a $300 cleanup would provide a good ROI (100%).
2. A $2,000/month house becomes a $2,100/month house. It’s an extra $1,200 a year. A $600 cleaning job would be justified if it produced a 100% return on investment.
Along with the empirical dollar ROI numbers, there are also the soft numbers to consider. Clean tenants who take care of rental units like to move into really clean rental units. And guess what? Most of them are turned off by dirty houses and will not move into them. Tenants who are willing to move into dirty homes are generally not concerned about the condition of the homes in the way that clean tenants are. So what type of tenant do you want to attract to your rental property?
With rental homes, return on investment is king. And a $600 maid service can push you further into the dark!