As a landlord, making sure your rental properties are in habitable condition is a must. Therefore, any time maintenance issues arise, repairs need to occur as soon as possible. Ensure that tenants know the procedure for submitting maintenance requests and know the warning signs to look for to avoid extensive damage. Then, once a tenant submits a maintenance issue, respond to it quickly and efficiently. Failing to do so could damage your relationship with your tenants. With that in mind, continue reading below as we examine ways to improve the work order process.
The Basics of Rental Property Repair and Maintenance Obligations
Your investment’s health is directly tied to taking good care of your rental property as a landlord. Therefore, preventive maintenance and handling repairs promptly are critical. The first step is understanding where the responsibilities lie between landlords and tenants. So, take a look below as we break down the basic responsibilities of rental repairs and maintenance.
Tenant Maintenance Obligations
The law and rental agreement govern your tenants’ responsibilities to you, the landlord. If your tenants fail to meet these responsibilities, you can end their tenancy and evict them. One of the major obligations a tenant has is to keep the rental property clean, safe, and free from damage. That said, they are not required to pay for normal wear and tear. However, they are responsible for fixing any damage caused by them or one of their guests. Secondly, tenants must report maintenance issues promptly to avoid further damage to the property. Notifying landlords of these repair needs should always be in writing.
Landlord Maintenance Obligations
Property owners must make the rental property habitable when the tenant moves in, make necessary repairs, and conduct maintenance to keep it in a habitable condition. A “habitable” property is one that meets heating, water, electricity, and cleanliness standards. Additionally, the rental home must be structurally sound and safe. Codes and requirements vary from location to location, so research your local laws.
So, to facilitate repair requests, follow the steps below:
- Supply incoming tenants with emergency maintenance contacts and an explanation of what constitutes an emergency.
- Outline the process of reporting any maintenance concerns
- Provide property manager contact information
- Take time to explain to tenants some common signs of potential maintenance concerns to look out for.
Remember: you are not required to foot the bill for damages caused by your tenants’ carelessness and neglect.
How to Budget for Rental Property Maintenance
Repairs are an inevitable part of being a landlord. Unexpected emergencies can happen even when you take all of the right preventative measures. Are you financially prepared? If the answer is no or you are not sure, check out the tips below on how to budget for rental property maintenance.
Keep in mind that these are merely to help landlords estimate how much they should set aside for potential costs. Actual amounts can vary greatly depending on many factors. That said, whichever calculation estimate you choose, saving for maintenance and emergency costs is a responsible and necessary step for investment property owners.
- The 1% Rule – Maintenance costs should equal around 1% of the value of your property. For example, a $200,000 property can expect to have $2,000 in annual maintenance costs.
- Square Footage Formula – Simply put, this formula estimates cost by square footage. So, a 1500 square foot home at $1.00 per square foot would equal $1,500 in annual maintenance expenses.
- The 50% Rule – This formula estimates that owners should set aside 50% of the monthly rent for both operating costs and maintenance. Therefore, if the monthly rent is $1,000, then $500 will go to expenses.
- Monthly Rental Formula – In terms of total annual maintenance costs, this estimate states owners should anticipate costs of 1.5 times the monthly rent. In other words, if the rental rate is $2,000 per month, annual maintenance expenses are around $3,000.
What to Look for When Hiring Contractors and Vendors
Timely maintenance is a major aspect of a landlord’s success in rental property management. In some cases, an owner may be able to complete some repairs on their own. However, a time will come when you will need a professional or licensed specialty technician. When that happens, investors have no choice but to hire an outside vendor, but how can you be confident in your choice? Read on below as we break down what to look for in potential vendors.
- Reputation – Thanks to the internet, a company’s reputation is more accessible than ever. So, take advantage of the insights you can find through Google reviews, Facebook groups, and even Yelp to gain insight on potential vendors.
- Willingness to Address Concerns – You are likely to have tons of questions, and business-minded contractors know this. Therefore, experienced vendors can answer any questions you may have. If they are unwilling to answer or are evasive, stop there and continue your search.
- Attention to Detail – Pay attention to their personal appearance and company vehicles. How they conduct themselves and care for their equipment offers insight into how they will treat your home.
- Promptness – First impressions are lasting impressions. So, if the contractor is late to your very first meeting, move on! Ultimately, if you allow this behavior, ask yourself what precedent you are creating.
Why is Rental Property Maintenance Important?
Timely and effective maintenance is so important to the landlord-tenant relationship. Some of the only face-to-face contact you have with your tenants is when something is broken and needs repair. So, if those issues are not handled correctly and efficiently, things can quickly go sour.
Also, depending on your state’s laws, your tenant could withhold rent until certain repairs are complete. Additionally, a tenant may have the right to hire an outside party to make the necessary repairs. The cost would then deduct from their next rent check. Also, if the problem violates building or health codes, landlords could face a mess of legal woes. When serious maintenance concerns are not addressed, a tenant can contact local authorities, and landlords may be subject to fines or other substantial penalties.
Last, and maybe worst of all, your tenant might decide to simply move out of your rental property and end the lease agreement. This could lead to a construction eviction lawsuit against you. All the tenant needs to do is prove that uninhabitable conditions resulted from your reluctance to perform maintenance and that they left the property in a reasonable timeframe. Without a strong defense, property owners may face worse consequences than just the stress of filling a vacancy. So, prompt attention to any maintenance issue is critical for your rental property business.
The Process for Handling Rental Property Work Orders
Your tenant reports a maintenance issue, and the clock starts immediately ticking away. How efficiently you address these work orders says a lot about you as a landlord. Quick assessment is critical to determining the next steps and being on the way to alleviating your tenant’s concerns. To help you establish a process, follow along with the steps below.
- Assess Maintenance Issues
- Give Your Tenants Notice of Entry
- Hire a Professional Property Management Company
Assess Maintenance Issues
If your tenants know they can rely on you to take care of work orders promptly, there’s a good chance they’ll want to continue renting from you. So, after a tenant has submitted a work order, you need to assess the seriousness of the repair. Some critical repairs you may need to make to your rental properties include:
- Waterproofing and weather protection of roof and exterior walls
- Securing the plumbing facilities (including hot/cold running water and sewage)
- Maintaining and repairing air conditioning and heating facilities
- Fixing a faulty dishwasher, washer, or dryer
- Reinforcing weak flooring in second-story units
- Keeping a working toilet, washbasin, and bathtub or shower in a ventilated room that allows for privacy
- Ensuring natural lighting in every major room through windows or skylights
- Verifying an operable deadbolt lock, smoke detector, and safe fire or emergency exit into a street or hallway
Most landlords take care of these common maintenance issues to keep their rental properties up to minimum standards.
Give Your Tenants Notice of Entry
The last thing a tenant wants is for their landlord to barge into their home without any notice. And if a landlord does, they could face a lawsuit. In Maryland, you are required to provide notice to your tenants before you ever enter the rental property. Always inform your tenants that you need to enter to make repairs at least 24 hours in advance, and try to provide tenants with an estimate of how long each repair will take as a courtesy. However, keep in mind that you may enter at any time without notice if the repair is an emergency.
Hire a Professional Property Management Company
Think about the time you spend handling repairs – that’s time you could be spending on more profitable tasks. So, why not devote your time to those profitable tasks by hiring someone to handle maintenance for you?
When maintenance is needed, property owners can do the following –
- Hire a contractor
- Complete the repairs yourself
- Hire a handyman
- Have the tenant themselves perform the repair
However, these options can be anything from expensive to risky. That is why successful landlords turn to a property management company to take care of tenant repair requests. To help you find the best residential property management firm, ask your potential property manager a few important questions, such as:
- What is your maintenance process?
- How do you handle emergency calls?
- What is the average time it takes to close out a work order?
- How do you handle complaints?
- Do you provide tenants with maintenance surveys after you complete work orders?
- How many maintenance technicians do you have on staff? Or do you use contractors?
Although it takes time to find the most qualified property managers in your area, it is worth the time. Qualified full-service property managers help owners with various tasks that do not stop at just maintenance. Are you interested in residential property management? If so, consider Bay Property Management Group. We take care of your tenants and your investment property while relieving owners of unwanted property management tasks. Partnering with us frees up your time to build a more profitable rental property business. Contact us today to learn more.