A regular dilemma we face in property management is how to fix a problem in the owner’s best interest. We all share the same goal to make property repairs and fix problems in the most economical way possible. The dilemma is in how to solve some problems without just replacing or repairing the whole item. Do we start with an attempt for the simple solution first when the simple solution may cost the owner funds that could have been invested toward the replacement option?
The problem in focusing on being economical is when the simple, inexpensive, solution does not solve the problem. The second problem with the economical path is if it does not solve the problem, we have to move to a more expensive remedy and hope it works. Sometime, even a third attempt has to be made. Nobody likes having to try to solve a problem three times before getting it fixed. After three attempts, it most likely would have been cheaper to start new and enjoy the longer anticipated life the new item provides.
The best starting point is the remaining existing life of the problem item. It just does not make sense to tinker with something that is already aged to its useful life. That is when we strongly suggest replacement, even when it was not in the owner’s budget to do so. Otherwise the true definition of economical is no longer served.
“economical”= giving good value or service in relation to the amount of money, time, or effort spent.
There are four areas in property repairs that create the most frequent frustration for owners. In some cases there is a likely simple solution and sometimes it involves the tenant (tenant responsibility or live without). I always believe you have to consider how much you want the tenant to remain your customer when pushing back on them for many repairs. Our lease is very specific on responsibility, but I believe that a good tenant should be taken care of and malice needs to be a part of the equation.
A tenant call to report a roof leak in the corner of their master bedroom near a roof valley, may have a simple solution. A can of tar can provide an inexpensive (yet temporary) repair. A tear off of that section and laying new flashing and tar paper can also make a difference. What if the owner plans to re-roof within a year? What if the roof is only five years old? In this example most owners and property managers would likely try the tar first. Roofing tar can provide leak protection for a year. What if the tar does not solve the problem? There is ongoing damage with water penetration and you have to trust your tenant to let you know the leak has returned. It is frustrating but the roof replacement a year ahead of schedule is the right call. For the newer roof a partial tear-off will be needed to locate the problem. The frustration is you just don’t know until you get into the repair.
Heating and Cooling
Start with the age of the compressor or air handler. It is very frustrating to deal with no heat or cooling calls on weekends, holidays, or the middle of the night. The frustration is rooted in the very high cost for service at these times. It only takes a couple of service calls and pretty soon replacement of the 10-year-old unit would have made a lot of sense. Economically, don’t go past one service call. Take care of the tenants and create a permanent solution. The first service call may involve a temporary band-aid but there will not be a second call because the unit will be replaced. If you own rentals, it does not take long to learn that lack of heat or cooling is one of the most frequent, if not most frequent, requests for service from a tenant. And it always happens after-hours for the service companies!
What to do when the oven won’t bake, or the freezer won’t freeze? Our lease creates a dollar limit for repairs that are considered minor and are the tenant’s responsibility. The lease does not promise the owner will not spend more on the appliance. If the tenant wants the appliance, they can pay for the entire repair. Sounds like a good solution, right? It is a good solution in that it takes these frustrations and allows the owner to have the final say. No doubt, appliances are not fixtures and often owners do not want to provide them. It is a case by case decision. Usually, renters are not storing extra refrigerators and ovens. We believe it is best to provide these appliances as a landlord. I also do not want tenants tearing up my property moving appliances in and out. You may have a different opinion. Why exhaust multiple options before either telling the tenant to live without the appliance or finally giving in to replacement? It is frustrating but a happy tenant who stays in my property, allowing me to avoid a month or more of vacancy, is much more valuable than the cost of replacing a refrigerator. These issues do come up and they are frustrating.
Plumbing stoppages are also addressed in our lease and it states if it is found to be the tenant’s fault due to something put into the system that should not, the charge will be the tenants. I have no problem with enforcing this. It seems the investment in finding the solution is never that simple. The plumber has to be paid and the bill increases as a solution is attempted. In over 20 years of management and owning rentals, the majority of the plumbing stoppages we have found have not been from the tenant. They also have not been cheap to resolve and a big inconvenience for the tenants. Bad plumbing construction ( water will not flow uphill) or Mother Nature interference (tree roots getting into systems) have caused more than their share of stoppages. The one other common problem ends up being soap scum build up causing drain problems. How can I blame a tenant for this issue? Which tenant, if there have been three over the last five years? My opinion is this is a maintenance item.
With property repairs each attempted solution has a cost. If the tar does not work, there is now a cost that might not have been incurred. Moving to the “second-try” is also often more costly than just jumping ahead and moving up the time of the entire replacement. But how do you know? We have to pay the people who try option one. The decision to try option one was made jointly with the owner in order to save money based on the longer term picture. We still have to pay for the failed effort. Replacement is often the cheapest long-term decision.
Owning a rental comes with frustrations. And costs. Managing them smartly and economically can make a big difference in your bottom line.