Yesterday we talked about the need to develop an appropriate maintenance plan as a property manager. You do this to regulate the budget you apply towards maintenance, as well as to create a much more enjoyable place to live for your tenants, thus increasing the likelihood they will renew their lease, which increases your profits. As it is important to understand the different types of maintenance before creating a maintenance plan, I want to being delving into those types today.
In fact, categorizing your maintenance plan by type will be a good way of helping you develop a proper budget and keep costs down. With that being said, the first type of maintenance is actually the most unpredictable, and the most expensive – emergency maintenance.
Part of your duties as property manager is to be prepared for emergencies at all hours of the day or night – now if you have followed my advice here and built a team, hopefully this means you alone aren’t dealing with the issues. Having an on staff maintenance team can be a great way of dealing with emergencies. If you contract out your maintenance, then you may end up dealing with critical emergencies yourself.
Categorizing a maintenance issue as an emergency is important – that is, determine if the problem is critical and requires immediate attention. The sorts of issues that can fall under this umbrella include plumbing and electrical. Basically any type of problem where permanent damage can happen to the property, the tenant’s property, or the tenants themselves. As an example, one previous building I lived in had improperly insulated the roof over one apartment unit (this was a new building) – the first winter, the pipes froze in the ceiling and ruptured, completely destroying the interior of that apartment and flooding about a dozen below it (all the way down 3 floors). Unfortunately the emergency was not handled properly in this situation and many units were damaged.
Your maintenance plan for emergencies should include plans for crazy things like this (water should have been shut off and tenants below notified immediately, or some sort of action taken to help prevent further damage to other tenant’s property). You know to shut the gas off after an earthquake, right? These sorts of situations have no respect for your time or availability. If you are managing solo (no team working with you), it can be a good idea to educate your tenants on emergency shutoff procedures for utilities should there be a natural disaster, fire or other major event when you are not around.
Aside from doing what you can to avoid the inevitable, the real benefits to creating a maintenance plan come with preventative maintenance – which I also mentioned briefly yesterday. Many people are of the opinion: “if it aint broke, don’t fix it.” I find this to be a fallacious attitude to take towards ongoing maintenance. If you always find yourself reacting to maintenance issues, it is likely that your maintenance expenses are much higher than they need to be.
Regularly scheduled inspections and maintenance will help increase the life of the property you are managing – this in turn increases the value you get out of being the manager both in that you can manage the building longer, and by increasing the value to the owner (who will thus be inclined to continue to pay you to manage the building, and possibly other properties of theirs should they expand).
The real gold comes when you realize that the majority of costs of maintenance come from labor, not parts. This means if you fix problems when they are small (or before they become any size at all) your labor costs will be much smaller. You might end up paying more in parts over the long run, but you will save significantly on labor. To top it off, when you plan these out on a schedule, it’s possible to include in a structured budget, which you should be using to be compensated by the building owner.
Tomorrow: Part 2 of the different types of maintenance.