INVESTMENT PROPERTY MAINTENANCE
We deal with a lot of investment property maintenance. It seems we always have over 100 investment property maintenance jobs we are constantly coordinating. There is some confusion around investment property maintenance and landlord approval. So in this article I hope to address this for landlords to have a better understanding of what’s involved and the process.
Here in Qld when a landlord engages a property manager to manage their investment property they have to sign an authority to manage the property called a Form 6. Part 8 section 2 Repairs and Maintenance indicates the amount a landlord authorises the property manager to spend on a repairs and maintenance without having to get the landlords approval. The industry standard is 1 weeks rent. If an investment property is rented for $600 per week, the property manager can organise maintenance to be done up to $600 without even letting owner know. Interestingly while all landlords sign this they are still surprised if any type of maintenance is done without them first being told about it. Which is fair enough. There is legislation and then human nature, which is often different.
With rents increasing, for us here at Asset Agents on the Sunshine Coast recently we have been making this 1/2 a weeks rent on our Form 6’s.
WHY SHOULD A PROPERTY MANAGER BE ALLOWED TO SPEND MONEY ON INVESTMENT PROPERTY MAINTENANCE?
It’s a fair question really. Legislation states that a landlord needs to ensure the property is fit to live in and in a good state of repair. Plus the tenant must notify them of any repairs needed. So really the maintenance needs to be done regardless. If maintenance is not done then the landlord is in breach of the real estate tenancy act and the tenants could even consider sending the landlord or their property manager a breach notice for not addressing the maintenance. You can read more about who is responsible for repairs on an investment property on the RTA site here. You will see that not only does the maintenance need to be done, it needs to be done in a reasonable time frame.
When a property investor buys an investment property, they need to realise as a landlord they need to be prepared to budget for maintenance. Of course if a home is really old, maintenance will be much higher, compared to something that’s brand new.
SHOULD A LANDLORD GET 3 QUOTES FOR INVESTMENT PROPERTY MAINTENANCE?
It depends. If a property manager sends 3 trades people to quote on a $200 repair, it’s very possible those trades people will not be able to do this quote for free. To cover their time & fuel they may want to charge a $99 quote fee. With small maintenance jobs trades people just can’t afford to be driving to properties to quote on work they may not get. If a trades person can attend a property and do the work for around $200, if they had to quote they would probably then quote $350 to cover their travel time and to cover the quotes that are never accepted. Quote 10 jobs, win 2. Just doesn’t make sense for a trades person on small jobs.
If a property manager continually asked trades people to attend and quote first on all the work that trades person would soon stop working for that property manager, because they just can’t afford it. Many property management maintenance jobs are small fast repairs. They need to be done anyway. So it’s cheaper to have the trades person just attend and do the work, then go.
So when should you get quotes on maintenance? If something is over $500 it’s nice to get a quote. But also look to see what Part 8 section 2 indicates on your Form 6. The number of quotes to get really depends on many things. Usually we will get 1 quote from our preferred trades person and the owners are happy to proceed. Most property managers have trades people they use often and they charge a fair price. Landlords need to put a certain trust in the property manager. It’s a good idea to get more than one quote with large work like repainting a home, or re carpeting, or extensive landscaping too. Often in these situations we only get two quotes and it’s enough to understand if what we are being told is a fair price.
INVESTMENT PROPERTY MAINTENANCE – LANDLORDS CAN GET RIPPED OFF WITH
Yes of course they can. Landlords need to rely on their property manager to have access to trades people that are fair and do the right thing. I know here at Asset Agents we have gone through many trades people we have tried and just felt they don’t have our landlords best interest in mind. So we only engage with trades people that we trust and in turn we use them a lot so they are fair with their pricing.
CAN A LANDLORD USE THEIR OWN TRADES PEOPLE?
Yes they can. We have several of our landlords who have their own trades peoples. What’s interesting is while we are happy to engage and work with them, these trades people are not getting the volume of work we give our preferred suppliers, so often they cost more. But more often they lack the ability to communicate back to us what we need to know so when a landlord uses their own trades people we have this odd disconnect where we are unsure where the maintenance is at.
Often these tradies don’t read our emails, or get to the property in a suitable time frame, or get back to us if there is a delay on parts. It’s not that they are bad at their job, just that they don’t deal with us much so don’t realise the importance of what we need. Which is mostly to get to the property fast, keep us in the loop with updates & let us know when the job is done or if there is delays and why. It sounds like an easy fix of us just checking in on them. But if you refer back to my initial statement. We seem to constantly have over 100 jobs we are coordinating. For this reason we rely on our regular trades people to get on with the job and keep us updated so we don’t have to chase them.
CAN A LANDLORD DO THEIR OWN INVESTMENT PROPERTY MAINTENANCE?
Certainly can. We have several that do. Keep in mind if you plan to do this you need to know what you are doing. You also need to be available to do the work. Recently we had a property with really old blinds that just needed to be replaced. 6 months later the owner still had not had time to get them replaced. Where our handy man could have done it within 14 days. If you plan to do your own maintenance you also need to understand legislation. You can’t just appear at the property. The tenant needs to be sent a Form 9 entry notice with 24 hours notice.
Landlords need to respect a tenant privacy and also realise that the home will probably be messy or not cleaned. People need to live. It’s not practical for a tenant to have a constant sparkling clean and tidy home. While we have many tenants they do look after their homes like I display home, not all do. I know my home isn’t always. We generally give it a good clean every 14 days & a tidy up every few days. But if you popped over to my place un announced it’s probably not going to be 100% in order. So doing maintenance is not the best time to spy on your tenant and how they live. This is what routine inspections are for, which your property manager should be doing 4 times a year.
HOW LONG WILL INVESTMENT PROPERTY MAINTENANCE TAKE?
Well I’m based on the Sunshine Coast Qld. Things move a little slower here. When I moved here in 2005, it took me a long time to adjust to calling a trades person then having them either not show up or show up in a weeks time. Just last week I was back in Sydney seeing my parents and they wanted some quotes for a few things at their home. So a quick look on Gum Tree and I had 6 people eager to come out within 60 minutes and this was Saturday at 4pm. Do that here on the Sunshine Coast and trades people are just not that available.
Here on the Sunshine Coast, our non urgent maintenance usually is sorted out within 4 weeks. Urgent maintenance usually within 72 hours. But it does vary. We may allocate work to a trades person then they get really busy or stuck on a big job and delays happen, so we then need to allocate the work to someone else. It’s a frustration for me that I am still not used to that part of the Sunshine Coast lifestyle.
WHY WILL MAINTENANCE BE DELAYED
So many reasons. The most common is tenant access. Tenants not returning the calls of trades people or not being available for a trades person. Then there are delays if the landlord wants a few quotes. Tenants have a habit of letting the second trades person know someone has already been to quote, so the second trades person often does not bother sending the quote in and we are left wondering where it is. Yes this again is a Sunshine Coast lifestyle attitude we need to constantly manage.
To get the quotes, to get the owner to view and approve one of them then to wait for that chosen trades person to attend, can take considerable time.
Then there is landlords just not able to approve the quote. Most landlords are not wealthy and if an unexpected large repair comes in they just don’t have the money. Or possibility the property may have multiple maintenance issues and the owner just can’t do them all at once so need to be stretched over time.
SO HOW SHOULD LANDLORDS GO ABOUT APPROVING MAINTENANCE?
They need to realise small repairs need to be just carried out by the property managers preferred trades person. Larger maintenance should have at least one quote so the owner is aware of what’s required. What we do here at Asset Agents is we log all reported maintenance so we can track it. When we do that, the landlord is sent an automatic email that explains what the Job is, and that we are going to look into it. Within this email we also explain that we will action this if cost effective, unless we hear otherwise from the landlord not to. Our trades person then attends and if it’s small and simple they deal with it on the spot. If it’s big they stop and send a quote.
We are a fairly small agency, we always have over 100 maintenance jobs we are managing so a lot of this is automated. Even with all this automation coordinating maintenance takes up a huge amount of our day.
I used to think a nice call to the owner to discuss maintenance would be lovely. But I’ve realised with the volume it’s just not possible. Property manager’s do not charge extra to coordinate maintenance it’s all included in their property management fee, but it’s surprisingly time consuming, which is why the legislation allows property managers to approve work to a certain dollar amount without the need of the landlords approval.
Some people seem to think we get kickbacks from our trades people. We don’t. Although last year one tradie gave us a box of chocolates from Christmas which was nice. We are just not interested in any type of kickback. We just want to look after our landlords and their investment properties the best we can. Interestingly utility service companies for power internet, etc. offer us kickbacks if we refer a tenant and we don’t even bother with this. Just not interested.
This is when a tenant reports every single tiny issue with a property. Yes a landlord needs to keep a property maintained & safe. Not everything needs to be fixed. So if a garden bed has a rotten sleeper, or there is a small crack in a wall joint or a ceiling cornice is slightly loose, some tenants we never hear from and it seems the homes just never have issues, while other homes seem to just continually have issues. It comes down to the age of the property, previous maintenance, the quality of the build and even the number of people living in the home. 2 people will create far less wear, tear and maintenance than 2 adults and 3 children.
I once had a tenant request all the toilet seats be replaced as they were a health risk. Sure they were old. But not a health risk. He made such a fuss I just paid to have them replaced myself because I didn’t want to bother the landlord with it and the tenants was so intensely adamant it was a health risk, me paying for them personally was just the easiest thing to do. Ha
SO WHAT ARE SOME COMMON THINGS WHERE QUOTES ARE NOT PRACTICAL?
A handyman or plumber can usually have this sorted for under $100. Sure these take about 10 minutes to fix so $100 may seem high, but people need to reaslise it’s the time for the trades person to also travel to the property.
Usually. The cistern needs to be replaced to fix this. At the time of writing Bunnings sells a cistern that even includes a new seat for about $80, which you can see here.
LOOSE OR BLOCKED GUTTERS
This can be more important to fix than people realise. A few years ago in an investment property I own in Buderim the gutters had leaves in them. We had some huge rain. The gutters over filled and water then gushed into the roof soaking the roof insulation. At the time we didn’t realise this had happened. Then we had a major mould issue in the ceiling. It cost around $5,000 to have sorted out. All because the gutters had leaves in them.
Part of the legislation is that a tenant needs the ability to lock the home. Usually a handyman can fix this within an hour. The cost of the lock will really depend on the type of door & current lock installed. Of course. It’s cheaper to replace the lock like for like. If it’s an external door just for the dead lock these can cost up to $300 just for the parts, plus labour. You can see an example here.
BROKEN POWER POINTS
This is a safely issue so needs to be addressed urgently. Power points are only about $10. But a handyman can’t legally install these. They need to be done by a qualified electrician. So expect to pay around $100.
BROKEN EXHAUST FANS
In bathrooms it’s really important to ensure exhaust fans work to avoid a mould issue. If you need to replace an exhaust fan consider getting a high capacity one to reduce the chance of mould. You can see an example here which is around $90. You need to consider installation maybe 2 hours so around $160 on top.
You can get a very basic fan for around $125 which you can see here and spend over $1,000. Tenants really do care about what fans look like. If you need a new fan. You may want to consider spending a little more and getting a nicer looking one like this. Keep in mind if you then do one you should budget to all all the others at some stage in the near future. New modern fans really do lift the look of a property.
WHAT ABOUT BIGGER ISSUES?
We don’t have any appliance repair technicians that will do a free quote. Some charge $160 just to quote. Others charge $99. If an oven or dishwasher is fairly old it’s often smarter to just replace it.
At the time of writing we have an oven repair. This owner decided to pay the $99. The quote came in at around $350 to fix a thermostat issue. So of course this will be repaired not replaced. Interestingly ovens seem to be more reliable than dishwashers. I assume due to less moving parts.
It’s really common for hot plates to stop working. Some can just have the element replaced. But others need to be fully replaced. At the time of writing we have a 900mm cook top that needs to be replaced. We got 3 quotes. Our preferred supplier quoted $950 to install a new one. We had 2 other quotes. One from the owners preferred supplier and someone we use occasionally. Both were around $1,700. As you can imagine the owner has chosen our preferred supplier at 1/2 the price of the other two quotes.
Just this week at the time of writing we had a landlord who had a faulty dish washer. We recommended they just replace it due to the age. But they wanted a quote to repair it. So they paid $99 to find out it would cost just under $800 to fix. Right now we are recommending to our clients they invest in Bosch dishwashers due to their reliability. For under $900 they can get a bosch like this delivered, installed and the old one taken away. So this landlord is now buying one of these instead.
Air conditioners are interesting. If it’s a quality air con like a Daikin often they can be repaired. What I have learnt if it’s a low quality air conditioner that is over 5 years old the biggest issues is you just can’t get parts so there is no choice but to replace them. Recently we had a client with two really old air conditioners not working. They wanted a quote to have them repaired. We had several people look and all said the same thing. You can’t get parts and they just need to be replaced. With split system air conditioners the main cost is the unit which will depend on the size. The quotes we had for a quality Fujitsu with 5 year warranty installed was $1,710 for a 2.5 KW and $2,100 for a 5.2 KW. This is really good value considering it includes the removal of the old air conditioners too.
These are interesting. First they could be electric, solar or gas. If they are electric it could be a plumbing issue or an electrical issue. Most people don’t realise that it’s more likely an electrical issues so an electrician needs to be called. Usually hot water tanks can be fixed, so do not need to be replaced. If it’s a gas hot water system it’s usually a plumber that needs to attend.
The property management industry talks about carpet in rental properties need to be replaced within 7 to 10 years. That would be nice but I don’t know any landlord that does this. I find most carpet last 15 years or even 20. But this does depend on wear and tear. Recently we replaced the entire carpet of a 4 bedroom home as the wear and tear was extensive This carpet was under 15 years old. The cost was around $5,000 to do this. Usually carpet needs to be replaced due to age but more commonly due to pet urine or stains.
Well fly screens are not big ticket items if it’s just one window or door. But if an entire house is due for new fly screens to all be replaced then yes it can add up. Usually these need to be replaced due to small nicks that have just happened over time. Usually this is considered fair wear and tear. Unless a pet has clearly caused damage.
If you refer to earlier you will see even I had to spend around $5,000 fixing a mould issue in an investment property of mine. Mould can cost a lot of money to sort out. Mainly because you need to first work out what created it, fix that. Then treat the mould and then monitor if the mould has returned. For major mould issues here on the Sunshine Coast we use Essential Shield who have a safe natural product.
These can be simple or complicated. Usually with a tiled roof it’s just a cheap fix to replace or seal 1 cracked tile. Tin roofs are more complicated. First the screws can cause rust, so they may need to be replaced and the rusted holes siliconed. It can also be hard to establish exactly where the leak is coming from. With tin roofs they do eventually rust. Sometimes just a small section needs to be replaced. Other times the roof is so bad the entire thing needs to be replaced. With a leaking roof you then get damage on the ceiling too, which also may need to be replaced or patched. So leaks need to be taken seriously and fixed urgently.
At the time of writing I have a landlord with a new build and a drainage issue. It’s not the fault of the builder, which took us a few months to establish. The property is getting excess water from neighbouring blocks. So bigger drains need to be installed and gravel, laid where grass will not grow. The cost of this is around $3,000. Right now we also have a blocked ensuite drain that needed an electric eel to clear some tree roots and another shower that was over flowing simply because the septic tank had not been empty in the last few years.
In the last 12 months we have had about 4 investment properties impacted by termites. One cost around $30,000 to fix. Another around $20,000 to fix. It’s an expensive issue. We usually discover these by the tenant reporting them or occasionally on routine inspections. Landlords must invest in an annual termite inspection at the minimum. But ideally a termite barrier. Which is anywhere from $1,500 to $8,000. These usually last around 5 years, need to be checked annually and then updated with new chemicals around 5 year mark.
Landlords need to budget for maintenance and work with their property managers and preferred tradies. If they are concerned maintenance is being done that they feel should not be or is too expensive chat with your property manager on how this can be handled differently. Keep in mind it’s legislation properties need to be maintained and it will keep your tenant happy. When a tenant is happy they will want to stay longer and often are happy to pay higher rent too.
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