MAINTAIN YOUR INVESTMENT

Owning Property means maintaining property. Preventative maintenance is a prudent way to maintain the value of your investment and ultimately makes sound economic sense on the capital invested over the long run. The integrity of your building including the structure, mechanical operations, electrical, plumbing, the condition of the roof, staying current with all building code regulations and requirements are all critical components of up keeping your property which need to be addressed on a regular and on going basis. Maintenance of your exterior including lighting, landscaping, painting, walk ways, parking areas, balconies, railings should also part of your regular up keep. Common areas shared by tenants including laundry rooms and equipment, pools and spas, exercise rooms and any other accommodating amenities need to be part of your overall maintenance program. More amenities equals more maintenance; however nice amenities attract nice tenants and equals higher rental rates.

Not only is it just being a smart investor to maintain your property with a preventative maintenance program, but it’s also simply a wise business decision to protect your liability and future legal problems, which often go hand in hand with being in the rental property business.

Make sure that you inspect the interiors of your units from time to time, not only do you have the right to do this but you also have the responsibility to know what’s going on in a lawful manner on the property which you own. Check to see that the smoke detectors have not been removed and are actually operating. Check for leaks which although they may seem minor could be so simple and inexpensive to repair now and make those repairs now. Also make sure to check for the required code enforcements inside the unit. Remember, the owner is the one who will ultimately be liable for a building not being up to code. Now when it comes to your favorite rent controlled tenants who have resided there forever, it’s even more important to to inspect the inside of these units, although you may not be interested in making them more comfortable you are still required to have all units up to code.

Stay constant with the allowed rental increases and talk with your tenants. Sometimes the tenants paying the lowest rents will actually consider moving for a price that can be recapped with the market rent over the first year or two. This often happens only with a change in ownership simply because the new owner talked to the tenant. You may have the opportunity to increase your revenue and also justify a higher sales price based on the actual increase not just a projection.

This is a full time job and it should be. There are constant changes in the laws and day to day living and deterioration of property make this an on going process. Management companies really can offer a viable service here and although so many have bad reputations there are many credible companies that have the ability to maintain the integrity of your investment. A good management company will have a variety of resources, contractors, subcontractors, maintenance, and service people and will also be up to date on the ever changing property laws, requirements and code enforcements. Typically, management companies will receive lower fees from the services provided because they provide a constant source of work to the different vendors and can pass these savings on to you. They will handle the entire rental process, have all the necessary forms and handle the day to day operations which can truly make the fee worth every phone call you won’t receive or have to make. Depending on the number of units that you own, if you have on site managers or whether you’re set up to run your own properties, a good management company can be well worth the fee which should average around 5-6% of the annual gross income and could be negotiable if you have a large number of units.

Regardless, if you are a hands on operator or use the service of a professional management company, maintaining your building is part of property ownership. The investment you make in your property includes the maintenance that you put into your property whether you are planning to keep the property or sell in the future. Even an “as is” sale does not release you from the responsibility and the liability of maintaining your property.