Summary: Are you spending too much money on maintenance? In this article, you’ll learn five tips for how to reduce rental property maintenance costs, including adopting proactive strategies, optimizing your workflow, improving energy management and more.
Whether you’re a first-time landlord or an experienced one, understanding how to manage properties the right way is crucial for success. Especially in the case of rental property where one of your major objectives is to establish a consistent flow of income from your real estate investment. One particular issue that will impact your profitability and chances for success is how you handle maintenance management.
As a rental property owner, property maintenance can easily become a problem if you don’t have a plan or system in place to proactively manage it. And that’s the case whether the property is being used for residential or commercial purposes. For one thing, you’re going to have different tenants moving in and out with each individual having their own maintenance needs and issues. Expectedly, these maintenance issues tend to increase with the number of tenants involved and the number of properties that you own.
Note that maintenance management goes well beyond just fixing things when they break. Thus, if you want to keep maintenance costs under control without having to wear many hats every day, you should definitely consider delegating maintenance to trained and capable staff.
Below are some tips to help rental property owners reduce maintenance costs using their own team.
We’ll also discuss some considerations if you decide to outsource maintenance to independent contractors.
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5 Tips for Lowering Rental Property Maintenance Costs
#1) Adopt proactive maintenance strategies
Proactive rental property maintenance encompasses all the activities involved in managing, planning for, and controlling the performance of your assets and equipment rather than just responding after a failure has occurred. It requires that you take preventive maintenance seriously.
A few advantages of proactive maintenance include:
- Avoid more costs later. Remember the old saying “a stitch in time saves nine?” By scheduling maintenance well in advance, not only will you avoid having to pay double for repairs when it eventually becomes an emergency, but you’ll also avoid having to replace very expensive items (e.g. heating, firefighting, cooling, plumbing installations, etc.) prematurely because they did not get the required attention previously.
- Identify opportunities for cost savings. When you have been implementing a maintenance plan for a few months or years, you’ll have valuable historical maintenance data. It becomes easier to compare your data from one year to the next and identify areas for more cost savings. For example, you can spot if some services or installations paid for in the past have added no value to the property or your tenants. In such cases, you may decide to discontinue using them.
- Better financial planning. Again, comparing your maintenance data and history empowers you to prepare and execute long-term financial plans and avoid extreme budgetary surprises in the foreseeable future.
#2) Use rental property maintenance software
We all know that time is money. As a rental property owner, you can significantly reduce the time that workers and contractors spend on executing maintenance tasks, but still ensure that they deliver the best quality of service by employing modern maintenance software.
Maintenance software today comes with a wide range of features and functionalities that are used to record, monitor, and manage the daily operations in your maintenance unit. Specifically, maintenance software can help you save costs on:
- Labor. Labor costs for your employees and contractors will likely constitute a major part of your expenses. Maintenance software will help you to minimize labor inefficiencies and cut excesses that your property can do without. For instance, it can be used to accurately estimate the labor hours for each maintenance task, decrease overtime costs, and help with prioritizing work. Also, it helps with creating, assigning, and managing recurring preventive maintenance tasks. Last but not least, by being more productive and proactive, you minimize expensive overtime costs.
- Equipment downtime. Maintenance software facilitates more streamlined maintenance practices through automated work planning and scheduling. It helps to ensure that all equipment on the premises is accounted for in your maintenance plan thereby reducing the problems of frequent equipment downtime and the resulting emergency repairs.
#3) Optimize workflow
Ensure that your maintenance team has the right resources to do their job quickly and efficiently. For a modern maintenance workforce, there are some simple and relatively inexpensive options that rental property owners can consider to improve their workflow such as:
- Improved communication. With the availability of smart mobile devices these days, maintenance teams can use them to quickly exchange vital information. They can also receive information and instructions in the form of texts, images, and videos while working on faulty equipment. This in turn can improve job quality and reduce the need for rework.
In addition, the ability to communicate this way helps to speed up job completion times since workers can receive all the required instructions for the next task while they’re out in the field without having to keep reporting to a central location first. This saves huge amounts of time for staff that work across multiple locations and properties. It can also vastly improve the speed of emergency responses.
- Utilizing relevant apps. There are several free apps available on android and iOS that will help to boost your productivity and that of your team as well. They will also save you a lot of time. Some of these apps are designed to help with tracking tools, daily planning, building inspections, security, and more.
#4) Better energy management
For many rental properties, mismanaged energy consumption can quickly lead to prohibitive maintenance costs. Fortunately, with a few tweaks, you can reduce energy costs by up to 20% or more. Start by investing in tools for tracking energy consumption in your property as they can potentially save you considerable sums every month. Especially in large commercial buildings or residential buildings with multiple family units, if you can pinpoint where and when your building’s energy use spikes, it can help with identifying possible areas to save costs.
Some other simpler yet effective ways to reduce energy consumption include automating lighting controls or switching to LED lighting. Likewise, your property’s heating, ventilating, and air conditioning (HVAC) systems will also require continual monitoring because poorly maintained HVAC units and other assets will typically spend more energy to function.
#5) Optimize inventory management
A common reason for delayed repairs and servicing is unavailable spare parts.
Although you’ll want to avoid this inconvenience, it is impractical and costly to attempt stocking every item. Therefore, balance is key. For a start, you’ll want to establish the optimum reorder levels, especially for the most frequently used items.
Again, there are many tools available to help you manage your inventory such as inventory management software and maintenance software (most maintenance software come with robust inventory management features). Optimizing your inventory management can save costs by eliminating much of the inaccuracies caused by human error, and prevent problems of stockout or overstocking.
By using the above tips on your rental property, you should begin to see some major improvements in your maintenance costs. However, you might not want to get involved in the day-to-day process. If that’s the case, you can opt for the services of an outsourced maintenance team.
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Using an outsourced maintenance team
Not everybody has the time or energy to oversee maintenance activities. If that is the case with you, there are always some reputable, local property management companies that should be able to handle that on your behalf.
Usually, outsourcing means that you’ll have less direct control over the staff and their work processes, but it generally translates into fewer headaches as they should be able to take care of all of your maintenance worries.
To ensure you do not get ripped-off when choosing an independent contractor, keep the following things in mind:
Comparing maintenance companies
Before hiring a professional maintenance company, your first task will be to research multiple service providers.
Confirm that they have a local presence and check what type of reputation they have. Once you have narrowed down a potential list of companies based on their track record of positive reviews, contact them and interview them in person to get an idea of their maintenance capabilities.
Remember that maintenance is your responsibility. If it’s mismanaged, you risk losing your investment and you could be liable if someone is hurt in your property and it’s traced to maintenance-related negligence. You’ll also want to check if the companies you’re considering have in-house maintenance personnel or they are using subcontractors. This can influence how quickly they are able to respond to your calls and meet deadlines – especially outside business hours. Ideally, you’d want to choose a maintenance company that has its own in-house team.
Choosing a transparent property maintenance company
It is critical that after careful consideration, you select a company that you feel comfortable with and that you can trust. A pointer to their trustworthiness would be how transparent they have been in their dealings with you so far.
Some red flags to watch out for include vague or slow responses to your questions and having only a few reviews even though the company claims to have been in business for many years (it’s possible that they have removed unfavorable reviews). In addition, are they unwilling to let you speak with current and former clients to get a better understanding of their operations? If you observe any of these behaviors, be wary.
Negotiating price and services
Are they clear about pricing and the entire scope of services that they’ll be providing? What about the expected timeline for completing specific tasks? If your rental property is a residential one, extra details like emergency call-out on weekends and holidays should be discussed extensively. Of course, everything agreed should be in writing and signed by all parties.
Tracking performed work and cost
Nobody guarantees that you will find the most cost-effective rental property maintenance company on your first try even if you do follow the tips outlined above. That’s why you should keep in touch with your tenants/run occasional surveys to track their level of satisfaction with the performed maintenance work.
The importance of maintenance for your rental property cannot be overemphasized. However, adequate maintenance does require a certain level of investment. The goal is to get maintenance right, yet still keep it at a level where it’s not eroding your profit.
I hope this article helps you find the right balance.