Stay Ahead Of Big Ticket Rental Repairs
By Paul Esajian on July 14, 2014
In a perfect world, owning a rental property would coincide with a monthly rent check and nothing else. Nobody wants to deal with the nuances of being a landlord if they don’t have to – that includes repairs. However, eventually something in the house will need repairs and force you to spend money. Depending on your level of negligence, repairs could be minor or crippling. Problems will happen with every rental property and items will need to be updated. If you ignore these issues instead of addressing them immediately, you will end up spending much more money in the long run.
You need to do everything you can to protect your rental property and maximize its value. You need to allocate funds dedicated exclusively for work on the property. The biggest reason most investors don’t do the work when they should is not because they don’t want to, but because they don’t have the money. Some portion of every rent received should be placed in an account earmarked for repairs, updates and seasonal maintenance. Fortunately, there are some warning signs that can give us an idea of what work may be needed in the future.
You want to stay away from the big ticket repairs that can wipe your bank account out when you least expect them. Most of these repairs would come from the roof, foundation, windows, aging mechanicals and plumbing. Any damage to the foundation can cause thousands of dollars in repairs and deem your property unlivable. If you have any type of slope that leads water to the foundation, you may be susceptible to leaks or cracks in the foundation. This could lead to mold problems and a whole new set of issues. Instead of waiting until the first sign of water in the basement, take steps to level the slope out. Once water seeps in the foundation, it makes your job that much more difficult and expensive.
It is important to monitor any trees and landscaping that could become an issue. If all you do to your property is have the grass cut and the mulch replaced every year, you could be sitting on a big problem down the road. Any trees that are touching the property are one strong storm away from falling. If your shrubs and bushes are overgrown and leaning on the property, they could cause termite or other insect related issues that you may never know about until years later. Remove any plants and trees that are physically touching the house. This work probably won’t add much to your rental value, but it can save your roof and help you avoid major mold and insect damage if ignored.
The inside of the property is where keeping your eye on little things can save you if you act quickly. Seemingly small things like plumbing leaks, clogged toilets and older mechanicals needing extra time to start up could be a sign of bigger issues. Here is where you hope to have a good relationship with your tenants so they can inform you of these items as soon as they pick up on them. If a small leak in a pipe in your basement is not treated quickly and professionally, you could be looking at a basement full of water. Spending the extra money to get the plumbing repaired or replaced properly will seem like a good idea when you need to start the job from scratch.
A clogged toilet may be more than just a clogged toilet. If there was not a dedicated item causing the clog or it has happened a few times in a few months, it could be a sign of something bigger. You may have a crack in your water line or your main drain line could need to be flushed. This is another example of turning a small rather inexpensive job in a major one if there are bigger problems that are ignored. As soon as a problem is detected, especially with the plumbing, you need to get to the bottom of it.
If your furnace, water heater, oil tank or windows are old, they shouldn’t be expected to last forever. Instead of waiting until they break or stop working at the worst time, you need to be proactive in replacing them. These are big ticket items that will cause you to dip into your reserves, but the alternative is getting a call in the middle of winter and scrambling to get them done.
There are dozens of areas in a rental property where money can be saved just by thinking of the worst case scenario and getting out in front of the repairs. These issues happen more than you may want to think or realize. Sometimes spending money before you have to instead of when you need to can add up to huge savings.