Top 5 Things You Need To Know
Maintenance is a necessary part of owning rental property. Too often, frustrated owners blame the tenant for these expenses. Yet no matter how ideal the resident, appliances break, hot water heaters fail, A/C systems need annual maintenance and plumbing systems often need attention. Even if issues arise as soon as the tenant moves in, the resident has usually inherited many years of hidden wear and tear prior to their arrival. Here are the top five things you need to know about maintenance and repairs when renting a property:
Plan For Expenses
On average, you can expect annual maintenance costs to average about 1.5 times the monthly rental rate; more for older homes, less for newer ones. So, if your home rents for $1,000, then you should anticipate spending approximately $1,500 in repairs throughout the tenant’s lease period. But remember, this amount does not include any make-ready costs in between tenants—carpet cleaning, painting and repairing damage, or vandalism. Don’t be caught unprepared by maintenance issues, expect them—and budget accordingly.
Know The Law
Managing tenant requests is not as simple as taking a call and sending someone to fix it. Property codes generally state what must be fixed by the landlord and require specific documentation, communication and actions that must be taken by the owner to meet all state and federal laws—sometimes even what type of technician must complete the repair. Ignorance of tenant/landlord law is not a defense, and many local judges have a zero-tolerance approach to infringements: the average cost of tenant maintenance lawsuits is $500,000 to $1,140,000, depending on your insurance policy. It pays to have an expert on hand to make sure you understand and comply with these laws.
Tenant Satisfaction – Turn Your Tenants Into Lifetime Customers!
In the rental business, the tenant is your customer. Responding to tenant maintenance requests has a direct impact on tenant satisfaction and how long the tenant stays. Plus, when you take care of the property in a timely manner, it encourages the tenant to care of it also, while making it more likely they will renew their lease for another year. On the other hand, failing to fix repairs quickly leads to tenant resentment and often results in property neglect by the tenant. And, once a tenant deems you are a slumlord, they will certainly make plans to move when their lease expires, which will cost you several thousands of dollars in turnover expenses!
A warranty of habitability is implied when a tenant and landlord join in a rental agreement. This means that you promise that the property is suitable to live in. Tenants have an expectation that they will be safe in the unit, and that water, plumbing, heat and cooling, appliances, roofing and other basic features of the property will function. If a tenant comes home for a shower after a hard day only to discover there is no hot water, or the air conditioning system has quit working and the kids are hot and cranky, it can be very frustrating—you would feel the same way. When such issues are fixed quickly, most tenants will forgive an irritation one time. However, if it happens often, the owner is slow to respond to requests, or maintenance is denied, the tenant will start planning their departure—and turnover and vacancy expenses are coming your way.
To get a unit “rent ready” means all safety and health issues have been addressed, the home and carpets have been professionally cleaned, all appliances are in good and working condition, the yard is landscaped and weed free, the interior paint is clean and free of nail holes and the plumbing and electrical in the home are working properly. In most areas, the property must also be rekeyed. The average cost to get a home rent ready in the U.S. is $772, not including the cost of vacancy days. You can easily see why keeping tenants happy to renew their lease saves you money.
When it comes to maintenance, approach your tenants with a sense of fairness. Just think of yourself as a renter, and become the landlord you would like to have. It is just as easy as that, and the money you save in lower vacancy rates and tenant care of the property will be well worth the little extra service you provide.