Whether you have one or 100 properties, it is a constant battle to keep a lid on your expenses. Broken pipes, broken appliances, broken leases: these can all eat into your profits whether you DIY or use a property manager.
But landlords too often learn that there is a big difference between cutting costs and cutting corners. Knowing how to walk that line between the two could save you big, and we brought together several property experts to share their money saving tips to help you tame your maintenance bills.
The property manager: choose wisely
If you are like the majority of landlords, you have a property manager running the show. But should they be?
Investors and experts alike will tell you that one of your most important decisions if you are going to engage a manager is in choosing the right one.
Neil Gibbins, the owner of a Hire-A-Hubby handyman franchise in Sydney’s northern suburbs says he has had far too much experience having to navigate dysfunctional manager/owner relationships.
“Be sure to shop around for a property manager and remember that the cheapest ones aren’t always the best,” he says. “You’ll save a lot more in the long run if you have a really good property manager who is able to engage the right maintenance people, and they care about the property but also know when too much is too much.”
Gary Burke is a former buyer’s agent and property manager who now runs Selflet, a Queensland-based service aimed at helping landlords manage their own properties. He tells owners not to be bashful when it comes to keeping tabs on their property manager. “Especially make sure you receive copies of entry condition reports and the lease agreement, so that you know what condition it was in. Also ask what checks were done on tenants and what was said by their referees.”
Let them make decisions
Hire-A-Hubby’s Gibbins says it is important to have a manager that can strike a balance between repairing every little squeak, and letting the house fall down.
“Sometimes I’ll get work orders that will come through and I’ll go out and see that and say to myself well, the tenant is asking for something that is just ridiculous and we will say it’s just not worth spending the money on.
“We will actually turn down some requests, and with the right property manager, they’ll know that we shouldn’t get sent out at all on calls like that.”
But on the other hand, having a manager you can trust to make decisions can be a big money saver.
“Give your property manager some leeway,” he says. “Don’t make your manager a message passer, because then all the responsibility for deciding goes back to the owner. So what will happen is they will ask for quotes on every little piece of work.”
He says he often gets called out to give a quote on a broken door handle, meaning he has to take it apart to find out what is wrong, only to put it back together again broken after he has figured it out.
“Then after all that, I have to submit a written quote and have to come back a week or month later when the approval comes through,” Gibbins says.
“Or, should I just fix it while I’m already there? I mean, I have to reflect that quote time into the price somehow, so I have to charge a little more when I finally go out there and fix it.”
Get repairs done quickly
Whether your manager is in charge or you’re handling it yourself, experienced landlords advise against putting off repairs. Beyond long term damage or liability concerns, handyman Gibbins says it makes financial sense to keep your tenants happy.
“Do the maintenance in a timely fashion and you’ll find that those good tenants will tend to take care of the minor things on their own,” he says. “They’ll change their own light bulbs and do their own minor maintenance around the property and not send it off to the real estate agent to get that done.
“The thing is, if that tenant has had a poor experience with their real estate agent or an owner and they have asked for reasonable things to be fixed and they have been rejected or delayed then they will just say [forget] it, I am going to ask for that light bulb to get changed because I am perfectly with in my rights to do that.”
Property investor Ian Fraser owns several properties, and self manages a block of apartments. He uses property managers on the others, but says he always tries to stay on top of the maintenance issues, and that a good relationship with the tenant is key.
“With the maintenance,” he says, “it’s really about talking to them and saying hey, ‘I don’t care how embarrassed you are about something, and I don’t care if it is the tiniest little thing that could be fixed in two seconds.
“If you just email me and tell me ‘look something is not working something has been broken or damaged, don’t feel guilty and don’t be embarrassed’, I’ll go in and fix things straight away.”
He says that way you are teaching them to look out for problems for you.
Keep it routine
Selflet’s Gary Burke says he sees far, far too many landlords forget about some simple upkeep that could save them big later on. He says a good time to swoop in and ‘kick the tyres’ around the house is when the house is vacant.
“The main things you need to keep maintained are your high cost repair items like your air conditioners, hot water systems and even your drainage,” he says. “It’s always a good idea in between tenancies to chuck a bit of Drano down the shower and other drains to get rid of some of the hair and gunk so it doesn’t block your drains and cause you problems later on.”
Burke says this kind of routine service around the property will help you spot problems early on, making the fixes inherently less expensive. Also, he says, not having the tenants around generally makes the work easier as well.
Handyman Gibbins says the gutters are also a place owners will often neglect in a big way. “Clean those gutters out on regular basis,” he says. “It is an annoying preventative cost, but particularly in Sydney this season when it has been raining all the time we’ve been fixing ceilings for the past couple of months because gutters have overflowed into the ceiling and now you’re dealing with replacing walls or ceilings.”
Inspect, inspect, inspect
Gary Burke says it shouldn’t be unreasonable to have your property manager inspect the property at least three times per year. He advises negotiating with them at the outset, and if they balk or try to charge you extra, he says, you should consider shopping around.
He says beyond just keeping an eye on what the tenants are up to, it is a good way to check in on whether any maintenance issues are getting out of hand.
Property investor Ian Fraser agrees, and says he goes even further. “I have my handy man, my cleaner and my gardeners do my inspections for me,” he says. “So I’ve got a good relationship with those guys and they’ll ring me up and we’ll have a chat and they’ll let me know if there is something going on.”
He estimates that trick has saved him a lot of headaches over the years, and that he’s been alerted to a number of maintenance problems that were better off getting attention.
Investor Ian Fraser says he wishes he would have found his latest money saving trick long ago. It’s simple, he says, hire retirees.
“They will save you a heap of money,” he says. “I put an ad in the local paper: ‘Retired gentle lady to maintain garden’. The last ad I put in I got 25 enquiries in two days in a town of 8000 people.”
He has put out similar ads looking for a basic handyman as well, he says.
“Now I’ve got three retirees working for me for a third of the cost and at half the hassle. They are a very underestimated part of the community.”
Gibbins and Burke both warn against hiring non-professionals, but Fraser says he has had a good experience and that his employees know their limitations and when it is time to bring in a pro.
Don’t be afraid to shop around for materials when the time comes to get some big repairs done or replace a faulty appliance.
Across the country owners are saving huge amounts by visiting salvage yards, second hand warehouses, or online retailers. See the renovation shopping guide in our June issue for some good tips on where to go for great deals.
Can you afford to buy in this suburb? Find out how much you can borrow