Being a successful investor in rental properties is all a matter of attitude. An investor who is looking for a quick buck with little effort will feel overwhelmed when troubles develop, and this can lead to the neglect and eventual abandonment of a property. In contrast, the individual who knows that real estate investment is a business and who wants to make that business thrive accepts responsibility for keeping the property in the best shape possible under prevailing market conditions.
The most important steps for maintaining a property include:
- putting a system in place for routine maintenance and emergency repairs
- informing tenants how to report emergency and non-emergency conditions
- controlling operating expenses
- exploring new sources of revenue production
This article will discuss the first two steps.
Routine Upkeep, Emergency Repairs, and Cash Flow
Neatness and cleanliness are essential for making tenants feel proud and comfortable about the place where they live or do business. A happy tenant is less likely to move away.
Unless the owners plan to do the work, they will have to hire a custodial-type worker or subcontractor to pick up loose trash around the exterior of a building, mow the lawn, maintain the back yard, wash the exterior windows, and clean the common areas, if applicable. The custodial worker also may need to put the trashcans and recycle bins on the curb for pickup on the appropriate days of the week and to return them to their rightful place after curbside pickup.
To prevent a property from becoming rundown, the owner must periodically inspect the grounds, the common areas, and the individual units. Peeling paint, stained carpeting, and cracked concrete are telltale signs of wear and tear. They are also conditions that easily and inexpensively rectified.
One of the least expensive ways to improve the appearance of a unit is to steam clean the carpets. Frequent cleaning prolongs the life of a carpet. Similarly, annual cleaning and maintenance extend the years of service that can be expected of the heating and air-conditioning systems. Sealing leaky roofs and basement crevices prevents serious water and mold damage.
Emergency repairs can wipe out months of cash flow. The condition, system, or item requiring repair or replacement may be very expensive, and the property owner may not have put away sufficient funds to cover the expense. Often, expensive emergency repairs occur when an owner does not know a reliable repairperson to call. To reduce the chances of overpaying for repairs — emergency or not — owners should develop a list of repair persons in the area of the property who can respond quickly and competently.
Tenant Calls for Repairs
Owners must decide how they want to handle calls from tenants about repairs. If an owner is using a property management company, the tenants will deal with the company when reporting problems with their units or other areas of their buildings. If owners are managing their own buildings, they would be well-advised to maintain a separate phone line or cell phone number, rather than their home numbers. Tenants have been known to call landlords at all hours of the night to report problems, large, small, or imagined.