3 Ways to Cut Your Maintenance and Repair Costs In Half
Business 101 taught us that if a business owner wants to increase profits, they must reduce expenses. As a landlord for over 20 years, I've learned that in order to reduce your expenses, you must be in the habit of anticipating maintenance problems, understanding the gravity of repairs before they are needed, and developing possible solutions before repairs elevate in costs. A landlord’s ability to efficiently strategize around the mitigation of maintenance issues by lowering the costs of maintenance and repairs, can have a tremendous impact on their bottom line, which is profits.
Below, I have outlined 3 key strategies that will help you reduce your expenses and better manage the costs of your rentals.
1. Preventive Maintenance – Regularly service your heating and cooling units, sewer lines, gutters, tree trimming over the house, pest control (I learned this one the hard way), and quickly handle other maintenance issues.
First, this helps because it forces you to continually view your property on a regular basis in between any regularly scheduled walk-throughs. If you are continually working on your property and staying on top of maintenance, you will learn to quickly spot problems and notice potential issues before they become problems. Secondly, it allows you to stay ahead of repairs and minimize the headaches of large maintenance issues. Preventive maintenance doesn’t stop the headaches, but it certainly helps ward off the severity of them. You can’t prepare for every maintenance situation, but you can get a good jump on them and lessen the damage they cause. Finally, this will greatly decrease the probability of maintenance issues piling up.
Every neglected maintenance issue greatly enhances the potential of another costlier maintenance issue down the road. For example, simply leaving old leaves piled up in the gutters can lead to soffit damage or costly foundation issues. Neglecting hanging tree limbs can lead to a damaged roof, which can lead to water damage and ultimately carpet damage. A $300 repair can quickly and easily balloon into a $3,000 repair. Preventive maintenance is paramount to helping lower the cost of repairs, especially over the life of your property.
FOR 6 EXPENSIVE REPAIRS
THAT ARE WORTH THE MONEY,
CHECK OUT THE VIDEO BELOW
My suggestion: Develop a regular maintenance schedule for each of your properties, and stick to it. Treat your property like you probably treat your car. Stay on top of minor maintenance issues before they become big issues
2. Transfer Some Risk to Your Tenants – Make your tenants responsible for certain "reasonable" maintenance items and be sure this is in writing on the lease.
This includes such items as broken windows, torn screens, clogged drains, appliance repairs, lawn care, and others. The tenant's responsibility should be for normal wear and tear. On my lease I list 15 items that the tenant accepts as working and in good order on day one. The tenant must initial each item as a part of the lease. If those items are damaged as a result of the tenant, then the tenant is responsible for repairing them. You always want to give your tenants a feeling of ownership in hopes that the tenant will take good care of your property. If they know they will have to pay for certain items over and above regular rent, they may be more willing to take care of them. By transferring some of the risk this way, you are allowing the tenant to share in the responsibility for maintaining certain aspects of the property and holding them accountable.
My suggestion: Do an initial walk through of the property with the tenant, go over the lease thoroughly with the tenant at the time they move in and again at renewal, and be sure the tenant understands fully what items they are responsible for. Be sure this is spelled out in the lease. Remember, a lease is a contract and all parts of a lease are admissible in court. Be sure it’s clear and concise, and follow it to the letter.
3. Find a Good Handy Person – There are two choices here. Either become a fantastic handy person yourself, or find a good, fair, and AVAILABLE one!
This is a very big deal and it’s often overlooked by many landlords, especially newbies. It’s also the most difficult thing to do because it takes time, a bit of luck, and plenty of landlord seasoning. As a landlord, you need to fully understand that the cost of employing the services of the big well-known local plumbing company with the fleet of trucks, fancy uniforms, highly advertised commercials, and big well stocked warehouse, is ALWAYS transferred to you as a consumer. It’s called overhead.
As a landlord you need to spend a tremendous amount of effort and time, locating quality fair-minded maintenance people that do not carry the overhead that will destroy your profits every time you need a repair on your property.
This will take patience and trial and error, but it’s worth the effort and will undoubtedly save you thousands of dollars. There are large repairs that you may need, or feel more comfortable, with the services of a large reputable company, but those should be few and far between. For the vast majority of the work you need, learn to do it yourself, if practical and feasible, and if not, employ the services of a good handy person. Do your research by checking the internet, call around and getting referrals from friends, read flyers and business cards on poster boards at local businesses, etc. The people that do the work you need done are all around you, and a lot of times they don't carry the overhead associated with the big companies. As a landlord you MUST learn to identify research, properly check references, and use these resources.
My suggestion: Not only do you need a good Handyman, you should always have a good backup to your Handyman, as well. I've learned over that years that a good honest hardworking Handyman is in great demand, and this person usually does work for a lot of people. If you find a good one, they won't always be available. Also, it’s ok, and advisable, to have a good handy person for different types of repairs. I have two separate plumbers, two separate electricians, and two different regular handy men. A great plumber may not know anything about changing the capacitor on your AC Compressor, and vice versa, so it's good to find people that specialize. Finally, when you find a good handy person, don’t hesitate to tip them or provide them a bonus for work well done. $50 extra dollars can go a long way towards lowering repair costs on subsequent work later on down the line. If nothing else, it shows great appreciation for good work, and every good solid handy person deserves to feel appreciated.