Being a landlord there is advise and opinions on maintenance and repairs in regard to your Coeur d’Alene rental, and many misinformed myths are complicating maintenance matters. Yes there will be maintenance and repairs at your rental property, however they shouldn’t keep you up at night. We will go over each rental property maintenance myth and hopefully you can manage your property with more ease and peace of mind.
Rental Property Maintenance Myth #1: Do-it-Yourself Repairs Always Save Money
One may take pride in being able to handle the diverse problems that may arise in managing a rental property, and is seemingly saving you from contracting specialized wok. And If you are a skilled handyman and can handle small repairs, basic plumbing tasks or appliance fixes, by all means save yourself from calling a local tradesman.
But also, keep in mind the wisdom of Kenny Rogers, “You’ve got to know when to hold ‘em, Know when to fold ‘em.” Rumor has it that Kenneth wrote this song when he experienced watching his carpenter father selectively turn down jobs (ok, only part of that factoid may be true…). But the advise is the same sentiment; even the best DIY jack- (or jill-) of-all-trades knows when to leave repairs to the pros.
Oftentimes, even if you can handle the rental property repair job yourself, does not mean you should. Consider these questions to debunk the Rental Property Maintenance Myth of DIY. How much is your time worth? Even if you’ve got the time and energy to take care of the repair yourself, often it makes financial sense to let a dedicated professional handle the job.
Also it is advised to keep in mind the tenant, they do not care if you are saving money by doing it yourself. For the sake of the tenant one must complete the job quickly, conveniently, and correctly. These consideration are the common practice of a qualified technician. One of the leading causes cited by tenants leaving a rental property when the lease is up, is due to a bad experiences from poor maintenance. Of all the things that are out of our control in a tenant leaving a lease, let’s not a maintenance issue be one of them. The money you might save doing it yourself is often just a delayed (and greater) loss.
Rental Property Maintenance Myth #2: Tenants are Responsible for Maintenance & Repairs
Unless it is a battery and light bulb replacement, maintenance and repairs are the physical and financial responsibility of the landlord. There are circumstances in which the tenant is responsible for actions caused by tenant, like a baseball bat to a window. However, even in this circumstances the landlord should be notified and coordinate the repair, and funded by the tenant either by the security deposit or out of pocket. In other issues such as appliances, these are most likely due to use and replaced by the landlord.
In an effort to keep the rental running smoothly and debunk the Rental Property Maintenance Myth of tenant responsibility for all repair, Real Property Management Coeur d’Alene schedules regular smoke detector batteries and furnace filters. This small detail can often be overlooked by the tenant, but needs to be addressed.
Other considerations that are often overlooked by a renter include trees, gutters accumulating debris, faucets and sprinkler system leaks, and bee hives. Keep an eye out for small problems inside and out to nip in the bud now, as well as identify potential future problems to either prevent or plan for.
Rental Property Maintenance Myth #3: Replacing vs Repairing
This particular Rental Property Maintenance Myth goes both ways. On one extreme, is the optimist who insists that anything can be repaired, including the “avocado-colored refrigerator they bought 20 years ago that never gave them any problems.” On the other end of the spectrum, is the argument that it’s always going to be cheaper to replace than to repair. The belief that appliances are disposable the new norm because “they don’t make them like they used to.”
Neither extreme is accurate, and as such, deciding between repairing or replacing a broken appliance depends on a number of factors. Before you fix in a frenzy OR rush to replace, you should consider the age and condition of the appliance or structure, the expected lifetime, previous fixes, and safety concerns (not to mention evaluating what is specifically wrong, if possible).
A great tip for replacing the 50/50 rule. If an appliance is older than half of its expected lifespan, and the cost of the repair is over half the cost of replacing (note, not necessarily half the original cost – there is a difference), then you should replace rather than repair.
Another reason to consider repairing instead of replacing is for tax purposes. You are able to use repairs as deductibles. On the other hand, the cost of an “improvement” – which most replacements qualify as, will have to be depreciated over years (the property’s life expectancy).
Consider the repercussions of repairing – losing a good tenant because the repair took too long, took multiple repair calls, and didn’t last and therefore reoccurring inconvenience and repairs. An ounce of prevention is worth a pound of cure… but a pound of cure trumps seventeen individual ounces of repair.
Rental Property Maintenance Myth #4: Estimating Rental Property Maintenance Costs
How much money should be set aside for repairs on a home? Well we have a few suggestions. A Rental Property Maintenance Myth is that the security will take care of everything. Listed below are a few choice formulas for your estimating purposes. Which formula is your favorite?
- 50% Rule: total operating costs (repairs, maintenance, taxes, insurance) will equal half of your rental property income. So if your property rents for $1,200/mo, you should expect $600 of that to go to keeping the property up and running.
- 1% Rule: maintenance will cost about one percent of the property value per year. So a property valued at $190,000 should cost $1,900 a year to maintain (or $160 a month).
- Square footage formula: Plan on $1 per square foot for yearly maintenance costs. So a 2,200 foot rental should cost roughly $2,200 a year in maintenance costs.
- 1.5x rule: maintenance costs will average 1.5 times the monthly rental rate. So if your home rents for $1,200, then you should anticipate spending approximately $1,800 a year in repairs.
- Murphy’s Law: anything that can go wrong, will go wrong
While it’s nice to have a rough guess on how much money you should plan on spending on maintaining your rental property, there are just too many variables to accurately estimate. Like the English language, there are exceptions to every “rule.” But make sure you have some sort of structure for saving or estimating so when expenses arise they can be addressed, keep in mind these two estimates:
- 76% of yearly rental property maintenance and repair costs will be higher than you’ll expect
- 99% of rental property repair and maintenance expenses will be higher than you’ll want
Rental Property Maintenance Myth #5: What Security Deposits Cover
Security deposits often are the primary source of conflict between tenants and landlord, and most of the time the reason is a result of bad communication on what the security deposit is actually for. There are two common myths related to security deposits:
- Tenant Misunderstanding: the security deposit is for the last month’s rent, right?
Wrong. While many landlords request a security deposit equal to a month’s rent, that does not mean those funds are reserved for the last month’s rent. Unless the tenant and landlord specifically work this out together beforehand in the lease, the security deposit will be handled separately. Even if the security deposit is to be returned in full, last month’s rent should be handled separately.
- Landlord Misunderstanding: the security deposit can be used for any make-ready, between vacancy repairs and cleaning costs.
Wrong again. The security deposit is intended to cover unpaid rent and perform needed repairs or cleaning that result from more than normal wear and tear. Some landlords intentionally stretch this rule; others may do so out of ignorance. Regardless, the security deposit should not be used to replace 15 year old counter tops or to paint the home after 7 years. If the tenants made severe damage due to neglect or intentional behavior, these standard wear-and-tear chores are NOT to be paid for with the security deposit.
We hope that you can take a Rental Property Maintenance Myth explained here and implement a more informed practice to being a successful landlord. Real Property Management Coeur d’Alene is company with decades of experience in these issues and the multitude of issues that may arise in regards to maintenance.
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