Jun 7, 2011

Maintenance and Rental Properties- Why It's so Important to be on Top of any Problems

There’s an unholy and remarkably stupid myth in the rental market that not doing maintenance saves money. Nothing could possibly be further from the truth. Failure to maintain rental properties can be an absolute financial disaster, and a self-inflicted one, for landlords who are foolish enough to believe this myth. Property maintenance is a form of control over assets, like home insurance for homeowners, making sure that those assets are properly protected.


Maintenance basics- The difference between making and losing money on rental properties


Buildings can’t repair themselves. They also can’t do much about typical wear and tear, or their age. Nor can plumbing or wiring fittings be expected to survive without regular maintenance. These fittings can also become dangerous to buildings, in the case of electrical fittings risking fires and with plumbing, actual destruction of the building and/or damage to other buildings.


Building structures are also vulnerable. Rising damp, movements in the footings of buildings and other problems can literally gut a building, given time. A small structural problem can be relied upon to become a major issue, particularly if you’re thinking of selling. Prompt maintenance is the cheapest, quickest way to deal with these issues. It’s also the only way of preventing major costs later on.


Case study


Ridiculous as it is to believe that not spending $100 on simple repairs is “making money”, it’s even more bizarre if you consider that a simple plumbing job can prevent spending thousands on water damage later.


This is a simple case study of a rental apartment’s maintenance issues:
The apartment is on the fourth floor. It’s an older building, circa 1970s vintage, with a timber frame and brick veneer exterior. The apartment’s plumbing is the same age and also experiencing “water hammer”, knocking on the pipes and spitting water coming out of taps, indicating problems. To save money, the owner does nothing, despite repeated warnings from the real estate agent.


The plumbing gives up the ghost one weekend while the tenant is away. It was simply too old and water pressure in the pipes finished it off. The apartments below are flooded. The water flows through gaps in the old apartment block and emerges in a large pool in front of the building. The owner receives multiple lawsuits from the owners of the apartments below and the strata title manager also threatens legal action.


For the sake of saving a few dollars on a correctible problem, the property owner is now faced with tens of thousands of dollars’ worth of damages, plus legal costs. Half of the building is now uninhabitable, and the amount of water which has seeped through the rest of the building is also a possible problem.


Was being cheap about maintenance a good idea? How could it be? The plumbing was sure to cause trouble at some point. “Water hammer” is a well-known sign of potential problems about to emerge.


Maintenance in this case would have been the equivalent of contents insurance, making sure that any risks from the building’s fittings was under control.


The moral of the story is simple enough: Maintenance = common sense. Don’t take the risk- Find and fix problems as they occur.
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5 comments:

MinnieRunner said...

Very well said Lina! Neglecting to fix a damage in your property will only do more damage in the future.

eNeS said...

Kalo saya orangnya jorok mbak. Boro-boro buat ngerawat barang, ngerawat sendiri aja udah susah. Makanya bini sewot terus, hehehe...

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mc said...

so right Lina. This is a good share and info...

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