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How to Avoid Mushrooms Growing in Your Rentals: The Preventative Maintenance Plan

by Arthur Garcia on June 19, 2012 · 15 comments

  

“Arthur, I think we may have a problem.  There seems to be a patch of mushrooms growing in one of your units.”

When my property manager first called me with this information, I actually thought the service request was a joke.  That was until I saw this photo!

preventative maintenance for your rental properties

The first question I asked myself was, why hadn’t I heard about this sooner?  According to the tenant, this mushroom appeared within a few hours, which is impossible.

I immediate sent my handyman out to the property to assess the damage.  It turns out that a pipe behind the shower had been leaking for several months.  The excess water formed a puddle in the corner of the bathroom.  Over time, this damp corner formed spores, which sprouted mushrooms – YUCK!

After talking with our contractor, it seemed that the best solution long-term was to re-pipe the entire house.  When I purchased the property, I knew that this repair needed to happen eventually.  Luckily I had set aside a portion of the monthly cash flow to pay for this eventual expense.

I can now happily report that the property is fungus free.

However, I still wonder why my tenant didn’t call us sooner when the leak started.  Even worse, she made no attempt to clean the area before she started harvesting a small mushroom farm!  Regardless of her reasons, this whole experience made me re-think my yearly maintenance plan.

Then it occurred to me – I didn’t have one!

I was quick to repair any items that were damaged or broken, but up until this experience, I hadn’t created a plan to minimize these types of big-ticket expenses.   I was largely running the business from a very reactive posture.

I realized that, unless I came up with a plan, I could literally end up losing thousands of dollars in avoidable repairs.  After spending a few hours kicking this idea over, I came up with the following maintenance plan.

The Annual Rental Property Maintenance Plan

I am now scheduling a yearly walk-through on all my properties.   I formulated a checklist of items, as follows:

Air Conditioner:  Replace filters at least twice a year, before and after summer.  I encourage tenants to replace filters on a monthly basis, but worst case scenario, I know it will be replaced during the peak times of use.  Doing this as well as servicing the unit annually can extend the life of the system by several years.

Tree Growth: Take note of branches and root growth.  Look for any trees that may need to be cut back from the house, walls, power lines or A/C.  Also watch for root growth beneath concrete surfaces.  Catching overgrowth early can prevent major expenses like repaving a driveway.

Electrical: Look for any damaged or overloaded sockets to prevent fire hazards.   

Bathroom: Check caulking in shower, toilet and sinks.  Apply new caulking as needed to prevent water damage and mold.

Roof: Repair any areas where damaged shingles are apparent.  Be sure to also check all drains and gutters for blockage and leaks.  This can extend the life of a roof by several years.

Danger wildcard:  This item isn’t limited to one area, but encompasses the safety of the overall property.  A few items that would fall in this category are: uneven pavement, loose fence posts, mold growth, exposed wires or anything else that might cause tenants harm.  Also be sure to replace carbon monoxide and smoke alarm batteries as needed.

One last piece of advice is to weigh the cost of replacing an item versus just temporarily fixing it.  It’s not necessarily the cheapest way to maintain a property, but it is essential for stabilizing long-term cash flow.

This list is by no means extensive, but it’s a great starting point and will help ensure you don’t end up with a mushroom farm in your rental property.

Happy Investing!

AG

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{ 14 comments… read them below or add one }

Sharon Vornholt June 19, 2012 at 3:13 pm

Great points Arthur.

One investor I know goes to his houses quarterly and changes the furnace filter. It gives him an excuse to see how the property is being taken care of. He does a “mini inspection” at that time which helps him to find small leaks under sinks and other problems before they get to be big problems. It has helped him get rid of bad tenants on several occassions sooner rather than later.

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Arthur Garcia June 20, 2012 at 12:25 pm

Hello Sharon,

That is a great idea and I think down the road I may have to implore a similar strategy. I’m going to start small using the plan above and slowly add “adjust while in flight” as they say. keeping an eye on the little repairs will definitely keep then from become larger headaches.

Thanks for your comment!

AG

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Kyle Hipp June 19, 2012 at 7:30 pm

I go to each of my properties each month to collect rent. This is quite uncommon but I have found it to be worth my time. I am able to talk with my tenants at least every other month, as sometimes they just leave rent for me in a spot. They know I will be coming each month and they know this at the application process. They then know I am involved and know that if they plan or have a history of causing problems they will not be interested. More importantly this gives me an opportunity to view the property each and every month with my own eyes. Some tenants will tell me every little thing which is great although it can be a problem but I also have no problem explaining that I aprreciate them informing me of this but I am not going to do anything and the reasons why, or that I will note it for the unit for down the road. I have also found that tenants don’t want to be a bother and when I come get the rent and ask about any issues they will feel comfortable bringing up the leaking faucet or toilet that can cost me a lot of money or cause future problems. This strategy has benefited me by not having to look for tenants in over 3 years as they all come from referals. I also have well maintained properties as a result. The last and maybe most important benefit is my tenants know that I care and act accordingly. If I say the yard needs to be cleaned up, they know what I expect and don’t think I’m overbearing just that I care that much. They see the value I provide and I have never had anyone complain about a rent increase because they see the value. It can also help in legal areas. Just last night I had a storm roll through and a tree at one of my properties fell on a tenants car. If they wanted to sue me they would have had a chance to win in front of the right judge I’m sure but that was the first thing they brought up that they had no intention of this. I was able to explain the legal situation as well as my knowledge and experience of the insurance situation, this lead to me having them clean up the property from the damage as well as some other trimming and pay them for that job specifically which will allow them to repair the cosmetic damage to their vehicle. It is an expense of my time to go this route but I habe found it to be very rewarding.

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Arthur Garcia June 20, 2012 at 12:21 pm

Kyle,

It sounds like you have your system hard-wired so congrats on that. You are really smart to manage your tenant’s expectations on the front end. This will no doubt help you ensure prompt receipt of rent, but it will also help you avoid preventable expenses. As for me, I prefer to outsource more of the day-to-day operations regarding property management. I’m not saying my model is perfect, but it has worked out well so far. The major obstacle for me is that my market is about 2.5 hours away from my front door.

Thanks for sharing all the information on your business model.

Take care!

Arthur

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Kama June 20, 2012 at 7:06 am

One small thing: mushrooms absolutely can appear within a few hours. My neighbor has a mushroom farm. That’s why it’s called a bloom. Sometimes you can watch them grow! Not that you’d want to in one of your rentals.

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Arthur Garcia June 20, 2012 at 12:16 pm

Hello Kama,

Thanks for the note about mushroom growth. Maybe my tenant wasn’t lying, but either way, this is definitely something I DON’T want to happen again. The only time I want to see a mushroom is when I am eating a pizza!

Thanks for the comment!

AG

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Paul June 20, 2012 at 1:12 pm

You make repiping sound relatively easy. Didn’t you more or less have to take out all the walls around the pipes. This is not really something you can do while tenants are living in the property, is it?

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Arthur Garcia June 20, 2012 at 1:30 pm

Hi Paul,

I apologize, I did not mean to make repiping sound easy – it was just expected.

The nice thing is that the property I am specifically talking about was partially pre-fabricated which means the piping for the entire house runs along side one wall. This makes the pipes very easy to gain access to. To access them, we have to bust open the stucco on the outside of the house and insert a new set of pipes.

I will also be changing the pipe material from galvanized to PEXs which is substantially cheaper and easier to work with.

The property will probably take 2 days complete the entire piping job. Fortunately for us, the property has two bathrooms. We are going to work on each bathroom on a separate day. Completing the job this way will allow the tenants to occupy the property while the re-pipe is taking place. I hope that addresses your concerns.

Thanks for the note!

Best,

AG

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Brandon Turner June 20, 2012 at 5:08 pm

Pex is the best! I use it on everything now days. I can re-pipe an entire house for a couple hundred bucks and one day of work. Not that I enjoy that type of work, but it sure beats soldering copper!

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Paul June 20, 2012 at 6:02 pm

Brandon, are you allowed to do plumbing without being a licensed plumber?

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Geoff October 27, 2012 at 2:09 pm

Depending on the State (each is different) if you are the owner of the property, you can do the work yourself.

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John Fedro June 20, 2012 at 8:26 pm

Very useful tips and real-world advice here Arthur! Glad to see you planned ahead and set funds aside for the inevitable repairs. Do you have a recommended dollar amount you allot and set-aside for each investment property for repairs that arise?

Thanks,
John

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Brody June 22, 2012 at 9:37 pm

We self manage our properties so we are already there once a month picking up rent. I also drive by my properties when I am in the area. It would not be uncommon for one of my tenants to look out their front window and find me in the front yard rolling up a water hose, picking up a piece of trash, etc.. It’s all about managing expectations..

I agree with your preventive maintenance plan and we do the same. We have got a couple of tenants on auto pay now, and we really like this. However, this does require us to set up an inspection a couple of times a year to check smoke alarms, air filters, etc..

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Rob Brown October 3, 2012 at 11:04 am

That is gross!!! haha I can’t believe this.

I wouldn’t want to live with those in my house. I can’t believe some people live like that… by choice?

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