Pipes burst. Grease burns. Things break. . . and when they do they have to get fixed. Well, you can let the water flow, but before long your land loving tenants will become seafaring sailors as your house floats slowly towards Spaghetti Junction. And the traffic nightmare that will create . . .
Property maintenance is a necessary and important component of property management. So, WHEN things break, who is going to fix it? There are only two options: you or someone else. Let’s look at each option, discuss the pros and cons of each and, hopefully, help you determine which approach is right for you.
Repairing your own property can be a great option. There are a couple of qualifiers. First, you must be local. In Atlanta, a city that covers a large part of north, central Georgia, local is really dependent upon the time of day (think traffic) and geographical location. You should live within 30 miles or you can spend your whole day making a simple repair. Even if you can get to the home relatively quickly, you will still need to travel to a local hardware store to purchase repair supplies. That leads to the second qualifier- you must have time. Time is a limited, and thus valuable, commodity. We all have the same amount of it but choose to spend it in different ways. If you do not have kids, hobbies, a job, or a church, you may have plenty of time to spend repairing your property.
Let’s look at a real example and see how a small toilet repair can easily cost you several hundred dollars:
You get a call from one of your tenants on a Thursday at 2:30 pm. You are at work and cannot take the call while in a meeting. So, you call them back, after the meeting, at 3:45. The tenants are a little frustrated but understanding. You spend 20 minutes on the phone troubleshooting the problem and reassuring the tenant that you will be able to fix it that evening. You schedule with them to meet at 7 pm. After work, you rush home and change clothes. You drive the 20 miles to your rental home but arrive a little late due to an overturned 18 wheeler on I-75. It is 7:20. After a few niceties, you make your way to the bathroom to find the fill valve is faulty and must be replaced. No big deal, you think, because it is a $20 part at Lowes. You drive the 15 minutes to Lowes, buy the part, and head back to your rental home. It is 8:30. You remove the tank bolts (after fighting with the rusted one on the left), the old fill valve, and flapper. You replace them with new, shiny ones. You reinstall the tank, make all of the necessary valve adjustments, thank the tenants for their understanding (that you are still in their home at 10 pm), and hit the road.
Ahhhhh- the feeling of money saving success! Now, you have a 30 minute ride home during which to bask in your money saving savvy. Yes! After all, you only spent $20! About half way home, it starts to sink in that it is 10:25 pm and you still are not home. Now, you start to reconsider your savings. You begin to recount the time you spent on this simple toilet repair and realize you spent 5 hours dealing with it. You figure you must be worth at least $11/hour (some of you highfalutin types believe you’re worth $50 or $100/hour). So, after some quick calculations, you find that this $20 toilet repair actually cost you between $75 and $500 (ok, most of us don’t make $100/hr so we will use $11/hour for argument’s sake). “Yikes! I should’ve called a professional” you think as you pull through a drive thru to buy dinner (another $8.74 added to the total cost).
Someone else can have several faces. Some investors are able to secure a local “handyman” who will make most repairs at a reasonable cost. Hiring a handyman can certain save you time and money until . . . they make a mistake or are involved in an accident. Then, all of your savings go right out the window. Why? I’m glad you asked. Generally, a handyman is not licensed or insured. They may be ready (though most cannot be available at all times of day and night to make emergency repairs), willing and able but, without the proper licensing and insurance, they make for a really chancy gamble.
PROPERTY MANAGEMENT COMPANY
For most investors, a local property management company is the best option (certainly, for an absentee owner). Local property management companies offer several advantages over other options.
First, a property management company knows federal, state and local laws. Knowing these laws keep you in compliance and potentially save you from thousands of dollars in fines.
Second, they have licensed, insured and trained contractors available to service any and all maintenance calls that may be received. At their disposal, they have electricians, plumbers, carpenters, roofers, flooring specialists, and septic, tree removal, appliance, and concrete companies. In fact, property management companies can have so much work volume that they can negotiate lower costs than can you (you may call them twice a year whereas property management companies may call twice a day). If there is a legal problem, property management companies usually have attorneys with whom they have worked and negotiated lower fees.
Third, property management companies usually accept emergency calls 24 hours a day, 365 days a year (yep, even on Thanksgiving!). They can have contractors on site anytime, day or night, to preserve your investment from the ravages of a burst pipe spewing water at 100 psi (have you ever tried to find a company at 2 am?). Many times, the contractor is on call so there is no need for the property management company to call several contractors looking for one who is awake and available.
Property maintenance is a necessary evil. You have to decide what is best for you as each situation is unique. For some, saving money is of primary concern. For others, their time is paramount. As you are working your way towards which way you will go, call us. We are glad to discuss with you your situation and help guide you in the right direction.