Shield Investment Properties From Winter Risks, Pt 1

Many regions of the U.S. have already received their first snows and freezes, but your investor clients can still fortify their “castles” against the coming cold. In this two-part article series, we’ll look at four winter risks from which your clients need to shield their properties. In Part 1, we address ways to protect occupied properties, and next month, we will address vacant properties and renovation projects. Let’s get started.

Water Damage

One of the most frequent winter losses we see at investment properties are burst pipes. The amount of catastrophic damage a water leak can do in just minutes can be astounding. Aside from damaging a tenant’s belongings (for which they may hold investors responsible), a pipe burst can ruin sheetrock, trim, or flooring, and often leads to mold growth if the damaged areas are not quickly dried out. Though it may take a bit of effort, the steps to preventing a burst pipe are simple and can help to avoid an emergency maintenance call followed by an expensive water remediation bill.

Investors should insulate pipes, especially those on exterior walls. They should not forget water lines that lead to a garage sink or that run to a hose on the outside of the house. Hose bibb covers can also help prevent outdoor spigots from freezing.

Also, your clients should remember insulation does not generate heat. They should make sure the HVAC system is in good working order and heats the whole house adequately. If clients haven’t done an annual check-up of the HVAC system yet, one should be scheduled before their tech’s schedule fills up!

Lastly, your client’s tenants can be instrumental in preventing a freeze. Before a cold snap, clients should remind tenants to:

1. Open cabinet doors below sinks to allow warmer air to circulate through those areas.
2. Leave faucets on a slow drip. Allowing water to continuously flow through the pipes may help prevent it from freezing.
3. Keep the heat above 55 degrees. Some may be tempted to save on a heating bill by turning the thermostat down, but then may also bring the property back up to temperature using space heaters or may even use the oven as a heating source. Both can be dangerous ways to heat a home. We will discuss that more later.

Fire Damage

About as frequent as water losses, fires are among the costliest losses we see to investment properties. In the process of burning the property, fires often lead to serious injuries or in some cases, death of the occupants as well. For this reason, fire prevention is of the utmost importance. Though fires can start in a variety of ways, two types of fires are top of the list when it comes to winter. What are they and how can they be prevented?

Cooking Fires

More cooking fires occur on Thanksgiving than any other day of the year. Following close behind are Christmas Eve and Christmas Day. (National Fire Protection Association) Entertaining guests can take a cook’s attention away from the large meal they are preparing which is most often how a cooking fire occurs – distraction that leaves food unattended on the stove top. Grease fires can also happen if a pan gets too hot in a cook’s absence. How to avoid a cooking fire?

1. Regular inspections – these give the investor an opportunity to make sure there aren’t any maintenance items that their tenant hasn’t already reported. It also helps to ensure the tenant isn’t creating a fire hazard with the way they keep the property.
2. Smoke and CO alarms – maintaining working smoke alarms are typically part of the fire code, and often a requirement of the investor’s insurance policy. At regular inspections, clients should make sure tenants haven’t disabled these and that they are in working order. They should change batteries at least twice a year and replace the alarms themselves every 10 years. Working smoke alarms cut home fire deaths in half (NFPA). Carbon monoxide alarms are also important for keeping tenants safe. CO is odorless, colorless and tasteless, which is why they call it the “silent killer.”
3. Fire Extinguishers – along with alarms, investors should make sure they have extinguishers in all common areas, such as hallways, the living room, kitchen, basement, and garage. They should follow the manufacturer’s instructions for maintenance and make sure tenants know how to use them. Extinguishers can keep a small fire from becoming a larger, more dangerous and destructive one.
4. StoveTop FireStop – this inexpensive fire suppression product can help put out a stove top fire before the cook has time to grab a lid or standard extinguisher. Should a fire occur, StoveTop FireStop is positioned right above the burners and ready to deploy fire suppression powder right onto the flames automatically. There is also a loud “pop” when the container opens which can alert the distracted cook to return to the kitchen and turn off the stove.

Heating Fires

Many fires we see in occupied properties are related to tenants using space heaters or other alternative heating methods to stay warm in their homes. To reduce this temptation:

1. Client’s rentals should be heated appropriately – Some jurisdictions require that a home be kept to a certain temperature for housing to be considered “habitable.”
2. Investors must stay on top of regular maintenance – HVAC systems should be inspected before the heater is used each season. If it hasn’t been done already, investors should do it now.
3. Investor clients should change furnace filters monthly – Who is responsible for changing them? If it is the tenant, clients should make sure they are staying on top of this responsibility. It can impact the air quality, but more importantly, can create a fire hazard.
4. Ban using ovens to heat the house – Investor clients should specify in their lease that heating the house with the oven is not allowed and educate tenants on the dangers of doing so, like the risk of CO poisoning.
5. Regulate the use of space heaters – If space heaters are allowed, they should be newer with a safety feature that turns the heater off if it is tipped over. Investor clients must instruct tenants to keep 3 feet of clear space around the heater. They should also be kept far away from blankets, drapes, anything that can burn and should never be left unattended.
6. Maintain chimneys – The investor’s chimney should be inspected before use each year. If the investor client hasn’t had it inspected already, they should instruct tenants to push the pause button on using it until this is done. Creosote and soot buildup can be an extreme fire hazard. The fireplace should also have a screen in place and a 3-foot perimeter kept clear of items that can burn (rugs, etc.)

Liability Issues

With the potential of increased foot traffic during the holidays, it is crucial that investors eliminate any potential slip-and-fall hazards. Neither the investor or tenant will be pleased if Granny Ruth ends up with a broken hip because she had no railing to help her up the three front steps to the rental. Though investors should always keep up with maintenance items like these to avoid injuries year-round, the risk this time of year can increase substantially which could mean the potential for multiple lawsuits with the investor client’s name on them. To avoid a liability issue this winter, investor clients should:

1. Make sure all walkways, driveways and stairs are in good repair – no uneven surfaces, no loose handrails.
2. Specify in the lease who is responsible for clearing walks and driveways in inclement weather. If this is the property manager’s job, the client should check to make sure that it is actually getting done. If this task falls to the tenant, the client should be sure the tenant understands the importance of keeping up with this simple item.
3. Specify in the lease where guests are to park. It will keep guests safer and could help to avoid potential fines as the property owner.
4. The tenant should contact the investor client if they discover any hazardous conditions:

• Wires protruding from walls or ceiling – electric shock or fire hazard
• Missing light switch/outlet plates – electric shock hazard
• Broken stairs/loose or missing handrails – injury hazard
• Leaky pipes – water damage to property and possessions
• Broken windows – safety hazard
• Exposed nails – injury hazard
• Flickering lights – electric shock or fire hazard
• Mold/mildew – health hazard

Security Issues

Did the investor client just move a tenant out of their rental? Did the tenant leave on good terms or was it through an eviction? Either way, the investor client’s property will need protection in between the prior renter and the next one. Vacant properties can invite theft, vandalism, drug activity or trespassing. Help isn’t needed to imagine all the destruction that can happen in the client’s absence. What can your investor client do to keep their property secure during the winter?

The investor clients can help their tenant make a graceful exit through Cash-for-Keys. If things go south this winter (yep, that’s a pun), Cash-for-Keys may help the renter get to their next living situation more quickly and lessen any potential animosity they could have had toward your client. Cash-for-Keys may also be cheaper than paying an attorney for an eviction.

Investor clients should closely monitor the property during and after move-out. If it has been a rough go with renter, your client may need to monitor the property during the actual move-out. Depending upon the situation, they may even want to have the local sheriff present to assist. For renters who have had a smooth tenancy, your client may only need to do a final walk-through, but being present to view the property one last time together can ensure that all keys are returned and the door is locked safely behind them.

Monitoring the property more closely during its vacancy is important. An evicted renter may be tempted to come back and damage the property once their belongings are out. If your investor client is fortunate to not have that concern, there may be others in the neighborhood looking for a place to find shelter or hide illegal drug activity. The investor should make sure they or their property manager drive by on a regular basis, keep the mailbox clear and keep the yard tidy. Getting the neighbors involved as a second or third pair of eyes can also be extremely helpful. If it will be a long duration between renters, the client may need to board up the property, but even then make sure the condition of the property sends a message that it is being looked after. Lastly, they should layer their security with good lighting, door and window reinforcement and an alarm.

For more tools to protect your investment from winter risks, Part 2 on protecting Vacant and Renovation properties is available now.