Property Management Blog

Importance of a detailed Market Readiness Assessment

Chris Knight - Friday, May 26, 2023

Importance of a detailed Market Readiness Assessment

Hey everybody, it's so good to be back. My name is Chris Knight, business development manager here with Red Door Property Management. And here to talk about what's one of my very favorite things, and you probably already know this, sometimes I feel like I just constantly repeat myself in some of these videos. But that's going to be because here at Red door we take inspections extremely serious. 

Today I'm going to talk about probably the most important inspection completed at all and that's going to be the one completed on the front end. What we here at Red Door call that is going to be the market readiness assessment. And that is just that. I mean, it is going to determine what items are necessary in order to make the property ready to hit market. But not only is it going to cover items just to get it ready for market, but we're really trying to identify items that are going to help make that experience that the tenant is going through. 

The move experience, which is stressful on everyone, is just trying to make that as good of an experience as possible or whatever influence Red Door can have over that or the management company can have over that. Just trying to make that the most enjoyable experience possible. And the best way that we can do that is to ensure that the property is prepared properly for that experience so that the carpet is in good condition, it's been cleaned properly and within a timely manner prior to the tenant actually taking over occupancy or that the wall conditions are properly. I mean, everyone here that's watching this video has heard about my top three items. And if you haven't, you need to go back and watch that video because your top three items are going to include your flooring condition, your wall condition and your overall cleanliness. And that's just the top three that every owner needs to be paying attention to on their way out and preparing their property to be an investment property. 

But not only are we trying to make that experience better, but what's more important on the owner's behalf is that setting that first impression experience off in the right direction is hugely important over the course of that lease term on the expectations in the relationship, back and forth relationship that you're going to have with that tenant. 

So what kind of communication tones are you going through? But for example, if that tenant relationship first impression that they're moving into and the carpet hasn't been cleaned and you're stumbling over yourself, well, I know you're moving in tenant, but we're trying to get that arranged, we'll have it done as soon as possible. Or if the walls are heavily still marked up and haven't been touched up properly, well then you're just trying to react to the issues that you already know are going to be complaints by the tenant moving in. And now I want you to picture moving in. The carpet smells fresh, looks fresh, the walls are freshly painted in good condition as you're trying to move all of your items into the home. The keys are where they're supposed to be, all of the locks work properly, things of that nature that are going to be very important to that experience when the tenant is moving in and all of a sudden the tenant is happy with their decision of moving into your home. So there's no buyer's remorse and no better way to say it than buyer's remorse, right? When the property is not ready to roll, when that tenant moves in, instant buyer's remorse kicks in. 

So I'm going to go ahead and jump over to the computer. I'm going to give you an example of what some of our MRAs or Market Readiness Assessment estimate forms look like when we share them with our owners and how we try to help ease that process not only on the owner side, but the tenant side as well. So let's go ahead and jump on over. Let's take a look and see what that experience looks like through Red Door. 

Okay guys, I wanted to give you kind of a breakdown from a new build property as well as through the lens of a property that's in need of some pretty serious rehab that an owner was aware about, but not to the extent that it was actually necessary. And I also want to emphasize not only is this process designed to improve the tenant side, but it's also highly designed for the owner side, right? I mean, not only is this a stressful time for a tenant during their move process, but this can very often be a very stressful time for a lot of owners. They're transitioning to a management company for the first time, not sure what to expect and really need someone to hold their hand as they kind of enter the investment world or investment process. And we at Red Door try to be as absolutely transparent as possible when going through this process. So I don't want to take up too much time with the words there, but this is kind of what we're looking at. 

This is an example of a recent property. We've signed on, completed a market readiness assessment and this is a new construction property. So just very standard items are going to be included on this MRA. Number one, a lot of new construction doesn't come with blinds already installed, so that's probably going to be a routine advice from Red Doors to install blinds on the property. Wherever there's exposed windows is. We don't expect tenants to provide window coverings for all of a property that they're only going to be occupying for probably twelve months or so. 

And then also pretty standard is just to expect a light cleaning immediately following a qualified tenant. Once we have all the traffic that comes with showing a property, we want to set the expectation that a light cleaning could be needed once we secure a tenant in just prior to their move in to hopefully facilitate the most successful process, move in process when we reach that stage. 

Also, let me mention, let me start here at the top. So what we try to provide here is at the top of this assessment, you're going to see two different video links, one for the interior and one for the exterior. Great, right? Super transparent. Very helpful for you to identify what work is going to be needed in both of those areas. And then we break it down into areas of importance, if you will. So very important items that need to be completed will be here in the blue. Recommended items that might increase market ability will be there in the yellow.   

And then other recommended work that might be continuous over the period of management. So HVAC, annual treatments, gutter cleanings that might be once or twice a year, hot water, heater flushes, so on and so forth. So it's broken down into three categories. 

The most important for sure in getting the property off and running is going to be found here in the needs to be completed prior to marketing the property. And very important to note that with Red door work primarily as advisors. We want to advise our owners to the best our experience will allow. So that is what this is all designed to do. 

Now going to jump over to another owner that we've recently brought on and this is transferring from another management company that did not provide such transparency and detailed inspection reports. So we've got a lot of deferred maintenance and we break it down into absolutely every detail that we can possibly discover when we're doing that inspection. So give you an example, a very routine thing. rekey all the exterior doors once a previous tenant moves out for a liability issue, of course. Landscaping, seasonal cleanup, trim the bushes. It's been deferred for many, many years. It needs to be cleaned up. Electrical assessment. Ceiling fans didn't work. We need to do a further electrical assessment to ensure that it's safe and properly functioning for a tenant to take. Occupancy, let's see, painting where we try to obviously limit the owner's expense as much as possible. 

So we try to be as detailed as possible where we could just simply suggest full house paint. We try to limit the owner's exposure here. One wall here, one wall there, just to keep cost down if at all possible. General maintenance items. Anyway, I think you get the idea. We try to break it down as detailed and as transparently as possible so that we can have that discussion on what is actually going to be needed to get this project moving forward. 

And then lastly, I just want to show you. So we upload those videos to YouTube and this is kind of what you're looking at. I'm not going to play the video right now. If you want, you can check these out on our YouTube channel. We do have a couple of examples there for you to take a look at to see how they're done. This one here would be working their way into the interior of the property. And then, of course, the exterior of the property. You'll see the landscaping is in pretty dire shape, needs to be cleaned up so that the curb appeal, because we want to attract the highest quality tenants. 

So that is the importance of completing a market readiness assessment. Be sure to like and subscribe.