A Major Headache For Owner And Property Manager
This is a manager” biggest problem. Tenants want service as they are paying 1/3 or more of their budget for housing and they want things fixed. The owner complains when they get a bill because no one likes bills. The fact is maintenance is here to stay and must be addressed if you want a successful rental business. With that said, let me discuss in-house maintenance vs. outsourced contract services (handyman, contractor, supplier). Experience has taught me that contract services are recommended over employee services/in-house maintenance. Advantages include locking in costs and avoiding over billing.
Employees must be kept busy and what I have found as I have used in-house services. The staff are usually not as competent and usually are salaried. A independent contractor can’t afford to take coffee breaks or engage in water cooler talk. Their time has to produce income as overhead is on-going. Another advantage is some items need to go to bid. A contractor is working for a profit and concerned with efficiency. An employee just doesn’t have these same concerns. It is a balancing act for the manager deciding what to maintain and what not. Some owners don’t want to spend any money; others insists that we keep their property in top shape. Emergencies must be responded to in a timely manner to keep damages to a minimum.
If it is a habitability item, we and the owner have a responsibility to attend to correcting the problem.
The definition of habitability is:
1) Effective waterproofing and weather protection of roof and exterior walls, including unbroken windows and doors.
2) Plumbing or gas facilities which conform to applicable law in effect at the time of installation and maintained in good working order.
3) Water supply approved under applicable law, capable of producing hot and cold running water and connected to a sewage disposal system.
4) Heating facilities which conformed to applicable law at the time of installation, maintained in good working order.
5) Building grounds in clean, sanitary, and free from all accumulations of debris, filth, rubbish, garbage, rodents and vermin, and all areas under control of the landlord to be kept clean, sanitary and free from all accumulations of debris, filth, rubbish, garbage, rodents, and vermin.
6) An adequate number of receptacles for garbage and rubbish.
7) Floors, stairways, and railings maintained in good repair.
8) One working phone outlet is required per unit.
The law states that a landlord must maintain habitability at all times. Cooling is not required. Excluded are damages causes by tenants. It seems property managers receive their biggest maintenance requests on the first of the month. This is when the rent is being paid and it is human nature to ask “What have you done for me lately?” A big job for the property manager includes sorting out legitimate requests regarding who is responsible then arguing with everyone about it. However, the toughest job of all is listening to the tenants complain about lack of service and later to the owners after they received the bill. It goes with the territory. The bottom line is that no matter who is responsibility, houses require maintenance.
New investors and their advisors never allow enough for maintenance of their rental.
What is enough? It depends on the age of the rental. A study done by others, state to allow about an annual average of $1300 annually for a single family home.
1. Stuff happens and stuff wears out. You can delay some maintenance, but you can’t avoid it and eventually it will affect income.
2. It’s cheaper to maintain a building than it is to repair it.
A big help in the operation of the home is operating manuals. Not all appliances operate in the same way. Very few people have been educated about home operation. Especially young people. We cannot expect people to operate a strange home, without some basic instructions. If they are coming from an apartment, most things were taken care of for them. We have to point out that on-site maintenance is no longer available. What are priorities? FLOOD, BLOOD, FIRE, AND HABITABILITY ITEMS, everything else is secondary.
If a request is of a secondary nature., everyone should be patient with their manager as with everything else in life, priorities come first. Another area that needs attention. IT IS CALLED THE BROKEN WINDOW THEORY. This means that ignored small disorders such as broken window, graffiti, abandoned cars, and unkempt yards, lead to larger disorders. We encourage that these items are handled ASAP.
Home Maintenance Warranty Programs
There are home maintenance warranty programs available offered by several companies. Service varies between companies, but it can be good insurance for a major repair. Other information needed regarding how old is the home? Builders have a 1 year warranty if a new home and a 10 year structural warranty. There is usually a roof warranty. If you use anyone other than the original contractor, the warranty may be voided. We need to know the builder and date of installation then we can usually arrange for warranty service. I hope this has enlightened you regarding home real estate investments.
My name is Lambert Munz and I have been licensed as a Real Estate Broker for 44 years with the CA Department of Real Estate. I currently am President of Arbour Real Estate Management, Inc.. Background was as a commercial broker. Currently a property manager and have been for 27 years. We offer residential and commercial management services.
I hold two designations – RMP Residential Management Professional and MPM Master Property Manager. Awarded by NARPM National Association of Residential Managers.
Past President of NARPM Sacramento chapter.
Learn more about Arbour Real Estate Management, Inc.
