| Being a rental property owner means dealing with | | | | we're being stingy by refusing their requests. But, |
| maintenance, repairs and tenant upgrade requests. | | | | you have to keep in mind that, while you want to |
| Even if you've hired a property manager, you will still | | | | keep your tenants happy the money your spending |
| have decisions to make regarding the upkeep of | | | | needs to either prevent or reduce an expense or it |
| your property. | | | | needs to generate revenue. |
| In general, you should set a maintenance schedule | | | | In the case of a renovation or upgrade requested by |
| that keeps your property and the unit(s) in your | | | | a tenant, we ask ourselves a few questions when |
| property in the best shape possible. There are | | | | we're considering whether to do the work the tenant |
| several reasons for doing this, but the biggest one is | | | | is asking for: |
| that a property that is kept in good condition | | | | - What are the costs of not doing it (is the tenant |
| attracts and keeps good tenants. The second big | | | | likely to leave and what will that cost if they do?)? |
| reason for doing this is that regular maintenance is | | | | - Is there another way to address the problem? |
| often a good way to keep costs down. If you leave | | | | - Are there any issues with delaying the expenditure? |
| things unfixed for long periods of time it can cause | | | | After we consider these things, we use a final |
| other issues. For example, a leaky sink left unfixed | | | | formula to calculate how long it will take to recover |
| could be damaging the cupboards and even the floor | | | | our costs. |
| underneath the sink. | | | | Total Cost of the Upgrade or Repair / New Money |
| If you have a property manager ask about their | | | | Earned (or Money Saved) each Month = # of months |
| schedule for doing the following things. If you | | | | to repay the expense. |
| manager your own property, then here's a suggested | | | | On items under $1,000, as a general rule of thumb, if |
| schedule for checking on things. | | | | you can recover the cost in 12 to 18 months then |
| Monthly: | | | | the money is well spent. |
| Walk the exterior of the property and pick up | | | | In the case of the blinds, the tenants wouldn't pay |
| garbage from around the property. Make sure the | | | | more rent just to have blinds. Instead we agreed to |
| lawn is mowed, weeds are pulled and everything is in | | | | pay for dry cleaning the curtains which will be less |
| good shape. If you have laundry facilities, check that | | | | than $100. There's no direct return on this - but the |
| the lint is being removed from the dryers and take | | | | tenants wanted the "dirty curtains" replaced so this |
| out any money if they are coin operated. | | | | will keep them happy and it's not a large expense - |
| Quarterly: | | | | especially given that the tenants have been long |
| Check windows, doors, and exterior of the house for | | | | term. |
| any leaks or damage. It's also a good time to check | | | | For the toilet replacement request, we decided that |
| on the furnace or air conditioner and change filters. | | | | getting rid of the grungy old toilet will not get us |
| Semi-annually: | | | | higher rent, but it will make it easier to attract and |
| Change the batteries in the smoke detectors, check | | | | keep good tenants. And, if we replace it now, our |
| carbon monoxide detectors, clean gutters, check | | | | tenant's father (an experienced plumber) will install it |
| appliances, plumbing and electrical outlets in the house. | | | | for free. Finally, we're replacing a water guzzler with a |
| Check for things that might be loose as well (door | | | | low flush model (est. water savings of $10/month) |
| knobs, railings, or screws). You aren't looking for | | | | that will qualify for a $75 water conservation rebate |
| things to fix but you want to be aware of things | | | | from the City of Toronto. The formula of benefits |
| that may require maintenance when a tenant moves | | | | looks like this: |
| out or trying to find little things to repair cheaply as a | | | | $250 - $75 rebate = $175 Cost of the Toilet |
| way to prevent bigger problems later on. | | | | $175 - $10/month water savings = 17 months to pay |
| When tenants move out: | | | | off (PLUS we save $80 on installation). |
| Have the carpets and drapery cleaned. Paint the walls | | | | The cost savings plus the added benefits of saving |
| if necessary (and usually it is), and get the unit | | | | installation costs made it a very appealing use of our |
| professionally cleaned (including the stove and fridge). | | | | cash. Just remember - real estate investing is a |
| Planning for this regular maintenance on your rental | | | | business and you need to get a return on any |
| property makes things fairly easy. You will have a | | | | money you spent - even if that return is simply in |
| good idea of when major expenses like a new roof, | | | | cost savings! |
| a dishwasher or a paint job will be required. You can | | | | If you are managing a property yourself there are |
| set aside a little extra rent money to cover these | | | | some great books out there to help you. Two books |
| costs. The trickier part can be knowing when to | | | | definitely worth checking out are: |
| make improvements to a rental property when a | | | | - (From the Dummies Series of Books) Property |
| tenant is asking you to spend money. | | | | Management Kit |
| In our Toronto tri-plex we recently turned down our | | | | - The Ultimate Landlord Handbook |
| tenant's request for blinds in the living room of one | | | | I know that's a lot of information to digest, but your |
| unit. But at the same time, we agreed to put in a | | | | monthly cash flow is dependent on you maximizing |
| new toilet in another unit. Our tenants can easily | | | | your rental revenue and minimizing your expenses - |
| figure out that we're bringing in nearly $4,000 in rent | | | | so this is pretty important stuff to know! |
| per month from this property, so they may think | | | | |