As a landlord, there is a lot to understand about rental property maintenance and repairs.
In this article, we will help you better understand the issues related to keeping your property safe and habitable. Repairs and maintenance for your rental houses are just necessary evils you will need to handle each year.
Rental property maintenance and repairs are probably the most overlooked expenses with investors regarding a prospective rental portfolio they want to buy. The truth is, though, no matter what shape your property is in when you rent it, there will be the eventual maintenance call that you will need to address.
The general rule in budgeting for rental property maintenance and repairs is approximately 1% of the home value per year. So, if your rental house is worth $200,000, you can expect around $2,000 a year in repairs and maintenance.
But this article isn’t about how much you should budget. It’s about making sure you choose the right person or company to help you complete those maintenance calls and repair requests.
It’s essential to think of your contractor, your maintenance and repair person or people, as a partner in your business. They’ll be a great person to bounce ideas off of and can help you keep your tenant safe and happy and hopefully in your home for 20 years.
If your house isn’t “rent ready,” then you’ll need to talk to a contractor to help you get it up to par. If it’s already “rent ready,” then you’ll need someone to make sure your tenant’s taken care of when they do call.
It’s one of the most significant partnerships you’ll make.
Nothing can slow you down or get you in trouble more than a lousy contractor. Faulty work, slow work, or no work have the potential to bring your rehab or maintenance work to a screeching halt. It also makes you look unprofessional in the eyes of your tenant or prospective tenant.
It’s tempting to find and use a contractor whose prices are the cheapest. And we understand the need to handle your investment dollars wisely. But be careful; you often get what you pay for.
That isn’t to say that low-priced contractors always do a poor job; we know some solid contractors at the lower end of the cost spectrum.
Still, you need to be careful. Poorly done work can come back and cost you double to fix. We have plenty of stories about that if you want to hear them.
Now that you have an idea of what to avoid, here are a few tips on what to look for in a qualified contractor for your rental property.
It’s crucial to know if the contractor you partner with is licensed and insured. Why is this so vital?
There are several reasons you shouldn’t let someone not licensed and insured work on your property. When you consider repairs and maintenance for your rental house, there is inherent risk:
What happens if an uninsured contractor falls off your roof and injures him or herself? They can sue and possibly take you to the cleaners. What would that do to your future returns on that property?
If you’re dealing with someone who is not licensed or insured, you are most likely dealing with someone who is not the best at their craft.
Take an example from our past. It was around 2007, and we were trying to get HVAC installed on our rentals for cheap. We found a guy we liked, and he installed a unit that saved us at least $1,000.
Later that summer, when our tenant got their enormous power bill ($900), we realized he had wired the unit wrong. We had to install a new system to replace that one. It came out of our pocket because this part-time HVAC ‘specialist’ didn’t have a warranty. Lesson learned.
These types of scammy contractors typically aren’t in business long. This will cause problems if you need warranty work down the road and you can’t find them. Or if they take their initial draw and never show up again. Back in the early days, we learned that the hard way.
Keep in mind that finding a good contractor is necessary no matter what type of property you purchase. Even if you buy a new house, you’ll eventually have repairs to be made. It’s best to start developing a relationship early so your work will be carried out faithfully and on time when it’s time for a project.
Here are a few helpful tips to ensure that the person you’re considering for your contracting work is both licensed and insured.
There are plenty of warning signs that you may be dealing with a less than reputable contractor. At the beginning of our real estate career, we used these fly-by-night contractors because they were cheap, and we thought they were saving us money.
In the short term, maybe. But over time, we ended up spending more money repairing their repairs, and we lost several good tenants because of shoddy work. The extra repair work and the additional months our houses sat vacant put us behind our investment goals.
The key to maintaining your rental property once you’ve found a quality contractor is performing regular maintenance as well as regular inspections.
Relatively simple issues that can be addressed before becoming more significant issues should be handled through regular maintenance. Some examples of regular maintenance landlords may perform include:
General wear and tear is expected in rental properties and differs significantly from damages. Something like faded paint or minor marks on the carpet are bound to happen with regular wear and tear.
In addition to regular maintenance, landlords should also take the time to perform regular inspections. Some of the rental property inspections you might consider adding to your routine include:
Learn from our early mistakes and find a contractor you can trust to be your long-term partner for your rental property maintenance and repairs. Doing this on the front end will give you a massive advantage in achieving rental house success!
Spencer is the VP of Marketing at Evernest. He wakes up with Google and Facebook on his mind. Having bought and sold over 150 homes in Birmingham, Spencer gets a kick out of helping new and seasoned investors navigate the mistakes he made as an investor. Spencer is also passionate about his love for Michael Jordan and does his best to explain to the Millennials (who never saw him play live) how much better he was than LeBron. He loves to hang out with his wife, kids, and the world’s best black lab, Jett.