The Importance of Regular Rental Property Inspections for Landlords or Property Managers [CHECKLIST]
When your Self Directed IRA or Solo 401(k) owns rental property, regular property inspections are a critical piece of ensuring your investment’s long term success. Inspections help you keep tabs on the condition of the property over time, how a particular tenant maintains (or trashes) a property, or even how your property manager is performing. By establishing a routine of regular and well documented inspections, you can protect yourself against destructive tenants and create a detailed record should you ever need to take an eviction or security deposit matter to court.
Following is information on the several types of inspections you or your property manager should be executing, as well as tips on how to leverage these opportunities to set the proper expectation and tone for your landlord-tenant relationships.
Move-In Inspection
A tenant move-in inspection is probably the 2nd most important step you can take to ensure a good tenant relationship, after good tenant selection and screening.
This inspection should take place when the tenant gets the keys and before their belongings have been moved into the unit. The tenant should be provided with checklist so that they can document the move-in condition of the unit and note any existing wear items or damage.
This is not an opportunity for them to present a wish list of improvements, though of course if there is a significant issue you and your team missed prior to making the unit available, that should be corrected. Rather, this is an opportunity for the tenant to protect themselves at the time of move-out, and for you to set expectations as to what condition is acceptable.
Many landlords or property managers will include a sheet that lists the costs of common repairs, so that a tenant will know what to expect when it comes time to make deductions from a security deposit.
Any issues with the property should be photographed and a copy of the photos and inspection should be provided to both you and the tenant.
By walking the property with the tenant, documenting with photos all maintenance issues, and providing a replacement cost listing with your lease and security deposit agreement, you will have set solid expectations for the tenant.
Routine Safety & Maintenance Inspections
You or your property manager need to visit the property on a regular basis. Depending on the neighborhood and type of renters, this might be on 6 month intervals or every 3 months. If you go any longer than 6 months, you are pushing your luck.
The purpose of the inspection should be twofold. Firstly, you should be inspecting and maintaining the property itself to ensure safety. Things like HVAC filters and smoke alarms should be checked on and replaced as needed. This is also an opportunity to ensure that the tenant is maintaining the property in a clean and safe fashion as outlined in your lease.
As with the move-in inspection, you should have a good checklist that is completed and signed by you or your agent, and a copy should be provided to the tenant. Any issues should be documented and if they are the tenant’s responsibility to address, a timeline should be set and a follow-up inspection scheduled.
Your lease and move-in documentation should outline these periodic inspections and you will want to schedule them in advance so that you can provide proper notice to your tenants as required in your jurisdiction.
Keep in mind that, while these regular inspections are a necessity for you as a property owner, they are an inconvenience for your tenants. Anything you can do to make them as minimally intrusive as possible will benefit your relations with your tenant. If you schedule an inspection for 9 am, for example, you sure better be there at exactly 9 am.
We’ve even known landlords who reward tenants with clean, well maintained units with some kind of small perk such as a coffee shop or movie theatre gift card. It is a nice way to thank them for their time and effort, and can be a key to retaining the tenants you really want in your rental.
Drive-By Inspections
Unlike formal, interior inspections of your rental, drive-by inspections do not require prior tenant notification. These types of inspections are a key way to ensure that the tenant is not violating certain terms of the lease, as may be indicated if you see pets or if there are regularly more vehicles parked at the property than there are registered tenants.
If things look amiss, you should notify the tenant in writing, and will likely want to schedule a formal inspection.
Move-Out Inspections
This is your opportunity to effectively document the condition of your property when a tenant moves out. If at all possible, you should conduct this inspection with the tenant present when they surrender the keys. This is the only true way to protect yourself if there are damages, as the tenant could deny responsibility if they just drop off the keys at your office and you inspect the property at a later date. As with all other inspections, your camera is a critical tool to properly documenting the condition of the property.
The above inspections should be a routine for any rental property, whether you manage units yourself of hire a property manager. In fact, ensuring that a solid, regular, well-documented regimen of inspections is part of the services provided by a property manager should be one of the keys to your selection of such a vendor.
If you use a third party property manager, and especially if the property is not in your local market, you may want to consider an additional type of inspection. Having a professional home inspector not affiliated with your property manager perform periodic inspections is a good way to keep tabs on your property manager and let them know you are paying attention to your IRA or 401k owned investment.
Download the full checklist here.
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Quick answers to common questions
We’ll take you through a simple, step by step process designed to put your investment future into your own hands…immediately. Everything is handled on a turn-key basis. You take 100% control of your Retirement funds legally and without a taxable distribution.
YES! In 1974, Congress passed the Employee Retirement Income Security Act (ERISA) making IRA, 401(k) and other retirement plans possible. Only two types of investments are excluded under ERISA and IRS Codes: Life Insurance Contracts and Collectibles (art, jewelry, etc.). Everything else is fair game. IRS CodeSec. 401 IRC 408(a) (3)
It’s actually pretty simple. Early on, regulators let the securities industry take the lead in educating the public about retirement accounts. Naturally, brokers and banks promoted stocks, bonds, and mutual funds—giving the impression that those were the only allowed investments. That was never true... and still isn’t. You can probably guess why they kept the rest under wraps.
It is possible to use funds from most types of retirement accounts:
- Traditional IRA
- Roth IRA
- SEP IRA
- SIMPLE IRA
- Keogh
- 401(k)
- 403(b)
- Profit Sharing Plans
- Qualified Annuities
- Money Purchase Plans
- and many more.
It must be noted that most employer sponsored plans such as a 401(k) will not allow you to roll youraccount into a new Self-Directed IRA plan while you are still employed. However, some employers will allow you to roll a portion of your funds. The only way to be completely sure whether your funds are eligible for a rollover is by contacting your current 401(k) provider.
A Solo 401(k) requires a sponsoring employer in the format of an owner-only business. If you have a for-profit business activity – whether as your main income or as a side venture – and have no full-time employees other than potentially your spouse, your business may qualify. The business may be a sole-proprietorship, LLC, corporation or other entity type.
A self-directed retirement plan is a type of IRA or 401(k) that gives you greater control over how your retirement funds are invested. Unlike traditional accounts held at banks or brokerage firms that limit you to stocks, bonds, and mutual funds, self-directed plans allow you to invest in a wide range of alternative assets including real estate, private businesses, precious metals, cryptocurrency, and more.
These plans still follow the same IRS rules and maintain the same tax-deferred or tax-free benefits as conventional retirement accounts. The difference is simply in how and where you choose to invest.
No. Moving to a self-directed IRA or Solo 401(k) does not trigger any taxes, as long as your funds are eligible for rollover.
Self-directed retirement plans maintain the same tax-advantaged status as traditional plans offered by banks or brokerage firms. The key difference is flexibility—our plans are designed to give you greater control and allow for a wider range of alternative investments beyond stocks, bonds, and mutual funds.
A prohibited transaction is any action between your retirement plan and a disqualified person that violates IRS rules and can lead to serious tax consequences. Under IRS Code 4975(c)(1), prohibited transactions include:
- Selling or leasing property between your plan and a disqualified person Example: Your IRA cannot purchase a property you already own.
- Lending money or extending credit between the plan and a disqualified person Example: You cannot personally guarantee a loan your IRA uses to buy real estate.
- Providing goods or services between your plan and a disqualified person Example: You can’t use your personal furniture to furnish a rental property owned by your IRA.
- Using plan income or assets for the benefit of a disqualified person Example: Your IRA cannot buy a vacation home that you or your family use.
- Self-dealing by a fiduciary (using plan assets for their own benefit) Example: Your CPA shouldn't loan your IRA money if they’re advising the plan.
- Receiving personal benefit from a deal involving your IRA's assets Example: You can’t pay yourself from profits your IRA earns on a rental.
If a transaction doesn’t clearly fall within the allowed guidelines, the IRS or Department of Labor may review the situation to determine if it qualifies as a prohibited transaction.
Disqualified persons are individuals or entities that are prohibited from engaging in certain transactions with your IRA or 401(k). Doing so could trigger a prohibited transaction, which may result in taxes and penalties.
Here’s who is considered a disqualified person:
- You (the account holder)
- Your spouse
- Your parents, grandparents, and other ancestors
- Your children, grandchildren, and their spouses
- Any advisor or fiduciary to the plan
- Any business or entity owned 50% or more by you or another disqualified person, or where you have decision-making authority
These rules exist to prevent self-dealing and ensure your retirement plan remains in compliance with IRS regulations.
(Reference: IRC 4975)
Understanding and following these rules can be tricky, but it’s very doable. The best way to stay compliant is to work with professionals who specialize in self-directed retirement plans. They can help you navigate IRS guidelines and avoid prohibited transactions.
If an IRA holder is found to have engaged in a prohibited transaction with IRA funds, it will result in a distribution of the IRA. The taxes and penalties are severe and are applicable to all of the IRA’s assets on the first day of the year in which the prohibited transaction occurred.
Yes. While self-directed retirement plans allow for a wide range of investments, there are a few important restrictions.
You cannot invest in collectibles or life insurance contracts, and you must avoid prohibited transactions—activities that benefit you personally rather than the retirement plan. These include things like buying or selling property to yourself or family members, using plan assets for personal gain, or self-dealing in any way.
Violating these rules could cause your entire IRA to lose its tax-advantaged status. To protect your account, it’s essential to work with professionals who understand IRS regulations and can help you stay compliant.
This is a common misconception. In many cases, professionals may simply be unfamiliar with self-directed retirement plans, as they fall outside their usual scope of work. CPAs and tax preparers are trained to file taxes, not necessarily to advise on alternative retirement strategies. Financial advisors and brokers often work for firms that focus on traditional investments like stocks and mutual funds—and may not benefit from or support alternative options like real estate or private lending.
Self-directed retirement investing is legal under IRS rules—but like any specialized area, it requires working with professionals who understand how it works.
The IRS has rules in place to make sure your IRA is used only for the exclusive benefit of the retirement account—not for personal gain or to help family members. These rules can get complicated because there are many ways a conflict of interest can occur, even unintentionally.
For example, if your IRA buys a house and rents it to your mother, you might be reluctant to evict her if she stops paying rent. That emotional connection creates a conflict between what’s best for your IRA and your personal relationships, something the IRS aims to prevent.
These rules help ensure your retirement account stays compliant and protected. (See IRC 408)
Yes. Most tax-deferred retirement accounts—such as Traditional IRAs, old 401(k)s, 403(b)s, and TSPs—can be rolled over into a self-directed IRA or Solo 401(k), depending on your eligibility. Roth IRAs cannot be rolled into these accounts.
You can contribute directly from earned income, subject to annual IRS contribution limits. The method and amount depend on the type of plan you have (e.g., Solo 401(k) vs. IRA).
To take a distribution, you'll request funds through your custodian or plan administrator. Distributions may be taxable depending on your account type and age. Early withdrawals may be subject to penalties.
For 2025, the Solo 401(k) max contribution limit is $81,250 if age 60-63, $77,500 if age 50-59 or 69+, and $70,000 if under 50. Traditional and Roth IRAs have a limit of $7,000 ($8,000 if age 50+). Limits are subject to IRS adjustments.
Yes. IRA contributions are typically due by your personal tax filing deadline (e.g., April 15). Solo 401(k) contributions follow your business tax filing deadline, including extensions.
IRS reporting requirements vary depending on the type of self-directed retirement plan you have. Here’s a quick breakdown of what you need to know
Please note: Our team can help you understand what’s required for your specific account, but we don’t provide tax or legal advice. We always recommend working with a qualified tax professional to ensure full IRS compliance.
Self-Directed IRA (Traditional or Roth)
- Form 5498 – Filed by your custodian each year to report contributions, rollovers, and the fair market value (FMV) of your account.
- Form 1099-R – Issued if you take a distribution or move funds out of your IRA.
- Annual Valuation – You'll need to provide updated FMV for any alternative assets held in the account, such as real estate or private placements.
Solo 401(k)
- Form 5500-EZ – Required if your plan assets exceed $250,000 as of year-end. Must be filed annually by the plan participant.
- Form 1099-R – Required if you take a distribution or roll funds out of the plan.
- Contribution Tracking – Keep records of employee and employer contributions. These are not filed with the IRS but may be needed for tax reporting or audits.
SEP IRA
- Form 5498 – Filed by your custodian to report contributions and FMV.
- Form 1099-R – Filed by your custodian. Issued for any distributions.
- Employer Contributions – Must be reported on your business tax return (and on employee W-2s, if applicable).
Health Savings Account (HSA)
- Form 5498-SA – Filed by your HSA custodian to report contributions.
- Form 1099-SA – Filed by your HAS custodian. Issued for any distributions.
- Form 8889 – Must be included with your personal tax return to report contributions, distributions, and how funds were used.
