3 Mold Issues That Can Disturb Your Residential Property Revenue

Table of Contents

This article explores mold growth and how it can affect your property revenue. Things discussed here include the following:

  • How to prevent mold in your residential property
  • Three ways mold can affect the revenue of your property
  • Common problems when dealing with mold

Molds are fungi that produce multicellular filaments called hyphae. Mold can cover any decomposing organic substance in the wild, but it needs to create a big mycelium before it is visible to the naked eye. Unlike insect colonies like ants or termites, mycelium does not consist of several creatures working together. Instead, it is made up of a web of hyphae that belong to the same organism.

Mold spores begin to grow when they reach an environment with adequate water, nutrients, temperature, and airflow. Unlike plants, which harness energy through photosynthesis, molds derive their energy from organic materials. Mold thrives on materials that it can absorb. Depending on where you live, you are likely to find mold in a home. 

A home’s value will drop significantly after mold infestation. The best course of action is maintaining heightened senses of sight, hearing, and smell to detect mold development at its earliest, more manageable stages.

However, it’s not against the law to sell a house with mold, but you might have trouble finding a buyer. Researchers found that even after remediation, as many as half of the prospective buyers back out when they learn about mold. Also, mold disclosure may be mandatory in some places. 

It is important to deal with mold issues as early as possible since mold can cause health problems and affect your property’s revenue. You can even find tenant relocation due to mold problems. This article discusses mold issues and how they can affect the value of a property, hence affecting revenue. 

How to Prevent Mold in Your Residential Property 

Maintaining regular property inspections is the best way to keep mold out of your house. However, it takes more than just having someone come in and look around for a few hours. Therefore, you could consider hiring a home inspector. Your home inspector may pay extra attention to things like radon levels, drainage around the house’s foundation, and the condition of the water heater and plumbing system. Before calling in a professional inspector, you should still perform annual inspections of any dark, low, or rarely visited sections of your house, such as the attic, basement, or crawlspace. Keep in mind that mold suggests the presence of water leakage or stagnant moisture deposits. Inspect the home’s windows, siding, and foundation walls for any signs of water damage.

Three Ways Mold Can Affect the Revenue of Your Property

Most mold problems can be fixed, but it will give potential buyers a bad impression of your home, so it’s in your best interest to get things back in order as soon as possible. Here are three ways mold can affect the value of your home.

1. Transfer Disclosures

An informal discussion with a client about a mold problem is insufficient. A written record of the disclosure and resolution is required – not only for the benefit of the buyer and seller but also for any future occupants or city officials who would need to know the property’s backstory. City officials could use a transfer disclosure to learn more about the property.

The disclosure act has been approved by some states for a long time, while others have yet to do so. For instance, in New York State, homeowners are legally responsible for any environmental or structural issues with their property. However, in the past, they had no reason to disclose such issues. It was entirely up to the prospective purchaser to conduct their due diligence by employing a third-party inspection or poring over available public records to learn more about the properties they were interested in purchasing. Now things are different.

Most states have some transfer disclosure law, albeit the specifics vary from state to state. Some jurisdictions, including Illinois, Kansas, and Oklahoma, mandate that a seller disclose any known health and safety issues with a property to a potential buyer. This is also the case in states like California, though there is no hard and fast rule about when the seller must provide such documentation to the buyer.

To prevent potential legal liabilities and fees, it is essential to check with a local Realtor to confirm the regulations in your area, as transfer disclosure rules differ greatly from state to state. However, having this document could save you money if a client sues you because of a mold problem.

2. Tenant Lawsuits

Landlords must provide safe and habitable housing. Therefore, landlords may be held accountable if mold develops in your rental. If a landlord has a major mold problem and refuses to remedy it, the tenant may have legal recourse under state law, such as the right to withhold rent or the ability to sue for damages caused by mold. After all, it is the landlord who pays for mold remediation.

3. Mold Caused by Leaks

Landlords have legal obligations to ensure their rental properties are safe and livable. This includes addressing water damage from broken plumbing, windows, and roofs, the most common sources of mold growth. A tenant can hold a landlord liable for damages if mold grows because of a leak and can prove to a judge or jury that the mold made them sick.

While mold growth might seem like a slight problem, it might cost you a lot of money if the client/tenant knows how to use the law to their advantage. It is, therefore, vital to always keep your property mold-free.

Common Problems When Dealing with Mold

Mold will not only cause financial problems. It can also cause health problems such as the following:

  • Watery eyes
  • Headaches
  • Fatigue
  • Itching
  • Difficulty breathing
  • Runny nose

Get rid of mold – not just for saving money but for your clients’ and clients’/tenants’ health.

Preserve the Value of Your Property

Don’t let mold cost you huge sums of money. Avoid this by hiring experts who understand how to manage properties. At Nomadic Real Estate, we will take care of your property and ensure it is in the safest condition.

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Enhanced Reporting

Your portal includes a selection of extremely useful reports. Reports are available in the “Reports” section, and are distinct from the financial statements. Unlike financial statements which are static records, Reports are dynamic real-time records that will update with current data every time you view them. 

Scroll down to learn more about Reports:

Navigate to the "Reports" module in your portal:

  • Keep in mind, these reports are dynamic records. They will refresh to display current information every time you view them. 

Enhanced Rent Roll Report:

  • The Enhanced Rent Roll Report will show the rent amount, last payment date, move-in date, lease expiration date, and security deposit amount for each of your tenants. 
  • It will also show a portfolio summary with occupancy percentage, vacancy loss, and more!

Unit Comparison Report:

  • If you own multiple units (or buildings) with Nomadic, you’ll get access to the Unit Comparison Report. 
  • This report enables you to quickly compare financial performance between your units at a glance without toggling between individual reports. 

Income Statement Month-Over-Month:

  • The Income Statement Detail – Monthly Report serves as a month-over-month record of portfolio performance. You’ll see itemized income and expense categories and can track monthly. This report will update with fresh data every time you view it. 

Financial Statements

Financial statements will be published to your portal on a monthly basis. The statements are found in your Documents library, and provide a historical record of all financial performance. The statements serve as a snapshot of financial performance over a given period, and are static documents (unlike Reports, the statements do not update/change in real-time). 

Scroll down for more info about the Financial Statements in your Documents library:

The Documents area contains monthly financial statements:

  • The statements in the Documents are are static documents. They are posted to the portal once a month to serve as a historical record of financial performance. 

Download a statement to see month and YTD financials:

You'll also find a month-over-month operating statement:

Portal Communication Tool

You can use your owner portal to communicate with our team. Any messages you send through the portal will go straight to your Account Manager. When we reply, you’ll get an email notification and you’ll also see the message in your portal next time you log in. 

Here’s an overview of using the communication platform:

Click "Communications" and navigate to "Conversations":

  • The communications module will contain a record of all messages that you create through the portal. 

Click the "New Message" button and send your message:

Responses will show up in the conversation ticket:

  • You’ll get an email notification whenever you get a response, and you’ll also see the message in your portal next time you log in. 

You can reply in-line using the comment box:

Each conversation will be logged in its entirety:

Understanding the Ledger

Your portal includes a ledger with all transactions. The ledger is populated with data in real-time as transactions flow through our accounting software. Much of this information is also available in the Reports area, as well as the Statements in your Documents library, but the ledger is the most comprehensive resource for diving into the details. 

Please scroll through the sections below to get a better understanding of how to interpret the ledger. 

By default, transactions are sorted chronologically:

  • The date reflected in the lefthand column is the actual transaction date, not the “bill date”. This is the date the transaction was actually processed. 

If you have multiple properties with Nomadic, you'll see the address for each transaction in the "Location" column:

  • You can filter the ledger to look at just one property, all properties, or specific sets of properties. 
  • If you only have one property with us, you’ll just see the ledger for that property. 

The Description column displays the transaction type:

  • BILL: this is an expense transaction, such as for repair costs or management fees.
  • CHARGE: this is a transaction  billed to the tenant, most typically a rent payment. 
  • NACHA EXPORT: this is a credit we processed to your distribution account. This type of transaction is how you get paid! 

The Amount column shows the dollar value of each transaction:

  • Positive Amounts: if an amount is positive, it reflects a transaction that is payable to you. Typically, this will be a rent payment that we collected from your tenants. On occasion, a positive number could also signify a journal entry or credit adjustment. 
  • Negative Amounts:  if an amount is negative, this is a transaction that is either payable to Nomadic or is an amount that has already been paid to you. Typically this will be for repair costs or management/leasing fees. Owner draws (net distributions into your checking/savings account) also reflect as negative amounts, since they have already been paid to you. 

The Account Balance column shows a sum of positive/negative transactions at a given point in time:

  • Account Balance should always equal zero after a net distribution has been processed. When the balance is zero, this means that all expenses have been paid and you’ve received the remainder as net operating income, leaving a balance of zero (meaning: no one is due any money, as all funds have been distributed appropriately). 

Navigating the Propertyware Owner Portal

Your portal includes some extremely useful features that help you understand your property’s financial performance at a new level, with real-time transparency into every transaction.

Scroll through the snapshots below for an overview of portal navigation! If you need more help or have specific questions about using the portal, you can reach out to your Account Manager any time for a screen share. 

You can filter all info by date range or property:

View a snapshot of income and expenses on your dashboard:

See every transaction in real-time on your ledger:

Statements and forms will be posted to your documents library:

View a suite of real-time financial reports:

See a running list of all bills, and drill down for more detail:

Under Bill Details, you'll find dates/descriptions/amounts and more:

You can also communicate with your Account Manager through the portal:

How do net distributions work?

Net distributions keep your accounting clean and simple. Each month we’ll collect rent from the tenants, deduct any repair expenses for the previous month and any management/leasing fees for the current month, and credit the remaining net operating income to your account. 

You’ll receive a statement via email each time a net distribution is processed, and can view all transaction details in your Propertyware owner portal.