5 Key Items To Keep Your Rental Property Maintenance Costs Down
If you own rental property, you will be required to do maintenance if you want to stay in business over the long term. Tenants are often blamed when problems arise, but it isn’t always the case that they are responsible. Even if you have perfect tenants, appliances are going to break or roofs are going to age. That’s why having an annual rental maintenance plan in place is a property management best practice. Your plan is not working if a tenant moves into a continual list of problems such as failing hot water heaters, plumbing or electrical problems, or a failing air conditioning system. If you are renting out properties, you need these five items in your back pocket to succeed as a landlord.
Expect the cost of maintaining your rental property to be 1 1/2 times the monthly rent on average. However, this expected cost will run slightly higher when your property is older. For example, if you charge $2000 a month for rent, then you should expect to pay $3000 a year for property maintenance and repairs. It’s important to note that the cost of any work you do to prepare the property for rental is not included in this price. if you clean the carpet or paint the walls or repair damages from any earlier tenant, that cost should be factored in separately. When you set your budget, always include enough money for repairs and maintenance.
Knowledge Of The Law
If your tenant calls you up with a problem and you fix that problem, it’s still possible that you might not be working within the law. Local, state, and federal governments have property codes that you must comply with as a landlord. Those codes may include proper documentation, modes of communication, and lists of which types of technicians can legally perform the repairs. Not knowing the laws won’t protect you. Depending upon the terms of your insurance policy, you may be required to pay out a bundle of cash if you lose a lawsuit brought by your tenant over maintenance issues. If you don’t know the law, hire an expert to school you in order to avoid paying the price which can run as high as one million dollars. Local judges won’t always rule in your favor.
In business, the customer is king and in the rental business, your tenant is your customer. If you don’t respond quickly to requests for maintenance, your tenant may decide it’s time to relocate. However, if you are responsive, they are more likely to renew their lease which means steadier cash flow for you. When repairs linger longer than they should, you’re going to have unsatisfied customers who will quickly come to resent you. Don’t earn the reputation of being a slumlord because you don’t take care of issues as they arise. You’ll soon get hit with higher expenses in terms of tenant turnover which will quickly sink your bottom line.
Rapid Response Times
When you and your tenant entered into a rental agreement, you agreed that the property would remain habitable. Tenants have the right to functionality of basic items such as plumbing without leaks, a solid roof, appliances that work when turned on, and others. If you fail to supply them with the means to take a hot shower or wash their dishes because the hot water heater no longer works, then they will get upset, and rightfully so. However, if you respond to their complaints rapidly and make those problems go away, you’ll be forgiven. Most people understand that things do break. Of course, if you don’t respond in a timely manner, your tenant is going to hit the highway as soon as their lease is up.
In order to rent to the next tenant, you have to have a plan in place to get the unit ready. Carpets, appliances, and walls need to be cleaned. The property you want to rent out must be safe and healthy to live in for the next tenant. Locks will need to be rekeyed. Have a checklist ready and a plan to address every issue rapidly so you can quickly get the unit rented out and start receiving those next set of rent checks. On average, landlords pay out $772 to get their units ready for the next tenant. The days that the unit is vacant are not included in this price.
Don’t think of your tenants as the enemy. Think of them as people who want a safe place to live. In fact, if you put yourself in their shoes and become the type of landlord that you’d like to have, you’ll find that over time, you will actually reduce your costs and increase your profits.