When your maintenance costs are properly reduced you can set a good rent price for it so that you will be in a maximum benefit as much as possible. So in this article I will tell you how to reduce your maintenance cost
It’s said that landlords should estimate maintenance costs at 12%-15% of the rent. This percentage depends upon the age of the property. But if we just use that percentage on a property that rents for $1,000 per month, that would be $120 to $150 per month. Oklahoma City rental property maintenance costs can wipe out a landlord’s profit quicker than anything else.
This article discusses seven ways to keep Oklahoma City rental property maintenance costs down.
It’s a lot like a tax. Just like a sneaky accountant can help eliminate greatly reduce the tax you have to pay, there are ways to reduce Oklahoma City rental property maintenance costs. If you use all seven techniques, you can expect substantial savings in maintenance costs over time.
But for starters, what is maintenance? Maintenance is defined as the process of maintaining or preserving someone or something.
It is not a capital improvement. A capital improvement is something you do to improve the value of the property. It is generally a replacement. For example, replacing a roof is a capital cost, not a maintenance cost. A capital improvement would be converting a garage into a bedroom to make a 2-bedroom home into a 3-bedroom home.
A make ready that includes some painting and minor repairs is maintenance. Another example of maintenance is repairing or replacing a leaking facet. Other typical maintenance costs include unstopping clogged drain plumbing, fixing outlets that aren’t working, repairing heating and cooling equipment, etc.
Seven ways to Reduce Oklahoma City rental property maintenance costs
#1. Invest in newer properties.
When I first started as a landlord, I bought old properties that, for the most part, hadn’t been upgraded in decades. That means properties that were built in the 1930’s with original wiring, suspect floor furnaces, water supply lines that were old galvanized pipe with low water pressure, and drain lines that were lead connected to rusted cast iron. In other words, high maintenance!
I almost never gave consideration to upgrading this old stuff until I started looking at the bills for fixing the same items over and over. Sometimes I spent more repairing something multiple times than I would have had I just replaced the item right off the bat.
What I’ve done is either sold the really old properties, or upgraded to heating and cooling systems, wiring, and plumbing.
This doesn’t mean you have to buy brand new properties. It just means buying properties built, for example, with slab construction. And, look carefully at items like the central heat and air units to determine how likely it is you will have to replace the units after you purchase the property.
#2. Put your foot down when your tenant asks for unreasonable maintenance items
When a tenant thinks they have your number, they think they own you.
We had one tenant who’s mode of operation was to scream bloody murder about anything and everything.
She would complain endlessly about the smallest things, and demand immediate attention.
We finally put our foot down with her when she complained about a broken window glass, which was behind a screen, that she claimed was broken in a hail storm. Never mind that we hadn’t had hail in more than a year, and their was no evidence of any other hail damage what so ever.
We told her that she was responsible for the repair cost. No matter how much she complained, and threatened to move, we held our ground.
We don’t get those unreasonable requests from her anymore.
#3. Don’t deferred maintenance if it Costs More in Long run
I’ve had tenants in properties in which I know the property is torn up, and the tenant is doing most of the tearing up.
I kept them in the property because the rent was paid.
What you MUST do if you see this going on is either immediately move them out of the property, or call them on it, and demand they start respecting the unit.
It’s a big mistake to let things go because repair costs just get higher. For example, if there is a leak under a sink, eventually it will ruin the cabinet. And, given enough time, it will ruin the flooring if the flooring has some wood components.
#4. Large expenses shop price
A big remodel might end up costing $25,000 or more.
Jobs like that are bid on a fixed price, not time and materials.
That’s worth getting multiple bids for.
And, negotiating on price.
Even on things like new heat and air systems. It’s worth saving a few hundred dollars by getting several bids, in my opinion.
It’s not like shopping at Walmart. Most contractors will negotiate on price. If you don’t attempt to get a discount every single time, you are leaving money on the table.
It’s a little different on time and materials. It is sometimes possible to negotiate on hourly rate, but not always.
#5. Beware of Some Property Management Companies
Some company charge $50 to $80 per hour on maintenance, while paying a contractor $15 per hour to do the actual work.
And, they seem to invent reasons to have work done on properties.
One way to gauge if there might be an issue to keep this rule of thumb in mind. Oklahoma City rental property maintenance costs for an older home should ideally cap out around 10% of your gross rental income, but may be more. As you might guess, newer homes need less maintenance. The maintenance costs for a newer home should be 5-7%. That means for an older home your property rents for $800 per month, your maintenance cost should average under $80 per month.
I find that this rule sometimes goes out the window on the properties if I have too much turn over (let’s say a tenant moving every 12 months), or a nagging problem that needs to be addressed like an old sewer line that’s always clogging up.
Read more About: How to Find and Keep Good OKC Maintenance People and Handymen
#6. Hold the guilty party responsible
I don’t like paying for mistakes, but if we screw up, we’ll own up to it.
It reminds me of a plumbing repair that went bad last winter. A copper pipe in the slab froze and broke.
It was a very tricky repair. My technician found the leak, and broke the concrete to expose the area that needed to be repaired. He then spent hours and hours trying to solder the copper pipe, but the weld just wouldn’t hold.
We finally admitted that we need to call in a plumber who specialized in those types of repairs.
The plumber had it fixed in a few hours.
It just wasn’t right to charge our customer for all that time our technician spent on site, so I wrote off a good amount for that job.
If you think your management company screwed up, let them know. There may be more to the story, but they may have indeed screwed things up.
#7. For Apartments: Cluster the work
My company manages a 15+ unit property in which the maintenance costs seem to be going out of control.
The owner and I took a look at the maintenance bills, and we noticed there were many trips to the property to do minor things that would take an hour or less. These were being done on individual trips. So, when a work order request would come in, we’d send out the technician immediately to handle the problem.
Good for the tenant, but very bad for the owner because they got stuck with a bunch of costs in travel. What we did to fix that was to limit our maintenance to one day per week. That way, we would handle all the maintenance calls that came in at one time.
Now, you may end up with some emergencies that need immediate attention. In those cases, we would go out immediately. However, we only found these to happen once a month or so.
The net result was to greatly reduce the Oklahoma City rental property maintenance costs to this location immediately.
OKC property management companies should help save you money on Oklahoma City rental property maintenance costs.
The property management company I own and operate, OKC Home Realty Services, LLC (dba Property Management OKC Plus), gets volume pricing on our the maintenance costs for our clients. We pass that cost savings along to our customers.
For more information about our services, <<<CLICK HERE>>>.