Hands up if you’ve ever just rented a property to a new tenant and the hot water system blows up? How about this one, new tenant moves in and no one can find the mailbox key?
BY EMILY SIM
It’s true, maintenance is a reality of being a landlord… but it doesn’t have to equal pain. I think the key to this is understanding what shape your property is actually in safety and building wise.
I’ve seen many older investment properties in better shape than brand new ones. Brand new means exactly that. Imagine a block of luxury apartments operate perfectly until every apartment has a new occupant actually move in. The lifts get a workout, the size of the waste pipes is tested as every occupant has their washing machine running for days and the security roller door on the under ground carpark is literally going up and down every three minutes to accommodate removalist vans. This is often the reason new buildings require so much warranty work in the beginning and that’s bad news for tenanted property.
How do you find out what shape your property is in?
There are two answers to this question – either you already own a property and you need to investigate this retrospectively or you’ve not yet invested and so you have the advantage of factoring maintenance into the purchase of your property.
In fact, if the agent is selling a managed property you should be able to obtain information from the property management business about how much and what kind of maintenance and repairs they’ve conducted in the past.
Retrospectively I’d start with the big four: electrical, plumbing, gas (if fitted) and pests.
You might find that there’s nothing wrong and think: why have I just spent all of this money? Good question, but you’re going to like the answer even better… With a tenanted property when a worst case scenario occurs and someone is injured the landlord can limit their risk of liability by regularly assessing the function and safety of the property. Having paid a qualified tradesperson to investigate this, a landlord will have evidence of this. So you can’t lose on this front.
In a situation where you do receive some advice to attend to maintenance, you’ll be in a position to make a plan for which work should occur first; obviously safety issues come first and comfort second. The advantage to a landlord with a plan like this is that they can slowly work through the maintenance or repair requirements with some time to budget, rather than just throwing money at a quick fix.
Take the hot water service.
How old is it? How long should it last? Is there a better unit to install right now rather than spending $300 on a repair that may only last for 12 months, because the life of an electric hot water service is about 12 years? A new unit will cost about $1100 at best, but given the recent government incentives for the installation for solar hot water, maybe you would be able to do even better.
If you don’t know what maintenance or repairs lie ahead for the property, you’ll continue to receive annoying phone calls from your property managers randomly asking for large amounts of money. My best suggestion is to put together a schedule that estimates the life and value of each fixture in the property, from carpet to gutters to air con to water heaters and everything in between. This way you can keep a handle on nasty maintenance surprises and the even nastier costs attached.
Emily Sim is the brains behind property management online community – www.apmasphere.com. With a career that includes senior roles at McGrath Partners and the Ray White Group, Emily is dedicated to finding new ways to deliver wealth to property investors. Email: email@example.com