It seems like the cost of everything is going up these days. If you’re in the business of renting investment properties, you’ve probably noticed dramatic increases in the price of labor and materials over the past few years. So, how do you keep the cost of repairs low while still getting the biggest bang for your buck? I’ll walk you through Neighborhood Realty and Property Management’s best tips and tricks.
1. Preventative Maintenance: When it comes to maintenance expenses, the best defense is a good offense. Don’t put off necessary or routine fixes. It could save you from those costly big repairs down the road. Your tenant is your best ally here, so make it easy for them to help you. Online tenant portals are great because they allow tenants to report maintenance issues quickly and conveniently, and they often have features that provide updates automatically. You can also consider doing things like having HVAC filters auto shipped to your tenants (with the price of these filters built into the their monthly charges). Having filters shipped directly to tenants means they’re more likely to swap them out. A clean HVAC is a healthy HVAC that’ll keep on kicking for years. So fix that little leak in the toilet, flush the ductwork when it’s needed, and get a chimney sweep in there when spring rolls around. Taking care of those little fixes up front can save you big bucks later.
2. Check in: While long-term tenants can be great, the last thing you should do is to put a renter in your hard-earned investment and not look back. You need eyes on and inside your property regularly, and tenants should expect routine inspections. Many tenants, while good-intentioned, just don’t know what to look for. That little crack in the upstairs shower might not seem like a big deal to them until the ceiling caves in months later. Before a lease can be renewed here at NRPM, we have each unit inspected and keep documented inspection reports. This helps us determine if a tenant should be offered a lease renewal, provides documentation for when they finally do move out, and helps us catch unknown maintenance issues. If you’re apprehensive about getting a tenant to comply with inspections, remember you are not their adversary. Your goal is to provide them with a healthy, safe, and comfortable home. Communicate that. Don’t promise you aren’t going to enforce the lease if you find violations or unreported repairs. But stress to your tenants that your primary goal is to protect them, the home, and your business relationship. We’ve found that most tenants, while maybe not excited about inspections, are at least respectful and understanding.
3. Landlord Insurance: It’s basic knowledge that you should encourage your renters to carry insurance, but many renter’s insurance policies don’t cover much in terms of liability to the landlord. This means that if Tina Tenant sets fire to your duplex, her insurance will replace her dishes but not your drywall. Just a few years ago, a tenant accidentally started a grease fire in one of our managed units, causing over $20,000 in damage to the multiplex. Because we’d required her to carry liability to landlord insurance, the property damage was covered by her policy, not the owner’s. Require tenants to produce proof of insurance that covers “Liability to Landlord” specifically for the full term of their lease. If you decide to renew the lease, require the tenant to submit proof they have renewed this policy. NRPM carries a blanket policy that automatically enrolls tenants into liability to landlord insurance should they fail to produce proof of insurance. Be careful here because there are laws surrounding auto-enrolling tenants in insurance. Do your research before implementing any kind of auto-enrolling policy.
As with any business, keeping expenses low is a make-it or break-it key to success. These three tactics are some of our very best tricks of the trade, and we hope they help! Neighborhood Realty and Property Management has been one of the top-producing rental property management companies in the Austin area for more than 30 years. If you’re interested in management services, we’d love to help you reach new levels of success!