Should a Landlord Ever Do Their Own Maintenance? [Poll]

43
My friend Ben Leybovich likes to give me a hard time because I still tend to do some manual labor with my rental properties.
In the past six months, I’ve climbed on several roofs, patched a leak in siding, vacuumed out 3 inches of water from a basement apartment, and even worked on a toilet or two.  Honestly, I try not to, but every once in while, I do it either to save some money or to save a bit of hassle trying to find someone competent to do it.
So today I just wanted to pose a question to our readers:
Should a landlord ever do their own maintenance work? Or should they stay out of it and work ON their business? Or is there a happy medium? 
Let me know what YOU think by taking the poll below and let’s see what the BiggerPockets community thinks…
(Then, feel free to share your opinions below in the comments!)
Should Landlords Do Their Own Work? in BiggerPockets.com’s Hangs on LockerDome

Subscribe to our mailing list

* indicates required Email Address * First Name Last Name
Share.

About Author

Brandon Turner (G+) is the BiggerPockets.com Senior Editor and Community Director. He is also an Active Real Estate Investor (Flips, Apartments, and Buy-and-Hold), Entrepreneur, World Traveler, Third-Person Speaker, and Husband. Come hang out with him on Twitter!

43 Comments

  1. No! Unless the landlord loves to repair things or they have no money. Their time is better sort on big picture things like goal setting, planning and working on the business.

  2. Great question and for the beginners absolutely unless they have deep pockets. Doing your own work will help you in the long run to see if you are getting over charged. Have you ever called a plumber, no offence my best friend is a master plumber but wow do they make bank. I’m to the point where I have to hire things with so many units or hire out what I don’t want to do :)
    Ben L is hiring out so he can do p90x with you!

    • I love this answer: There is so much to be said for a beginner to do this. The learning of the structure of the home, as well as the real time and effort, is something that can only be confident spoken about once you’ve done the work yourself! I did ALL of my work previously, and now i hire everything out, but I KNOW how to have that conversation: You only get that level of confidence having been there, done that! Great comment!

  3. People often say that an owner needs to spend their time finding the next deal. That assumes that the owner is ready, able, and willing to purchase an additional unit. Often owners are saving towards their next unit. If that is the case, I think their time is best spent doing whatever they can do to control costs. Often that means taking care of maintenance items that do not require special skills or licensing.

    Currently I work full-time and management on rentals. I am not ready to do my next deal today so my time is spent doing maintenance items if I wish to do so.

    • Arthur Banks on

      That sums up what I was thinking. If I’m going to spend time looking for the next deal that I’m not ready to purchase anyway, I may as well spend the time and save the money doing the repair. Sort of like if someone wants to rob me, they’ll just be practicing.

    • Shawn Thom:

      Even more important than rolling-up your sleeves to control costs, is working your brain to develop additional revenue streams or bring value-added services to your tenants: More parking than you need – rent spaces; Live on a corner lot w/ lots of space – lease access to the postal company for a “superbox”; negotiate a “safe ride home” program with a local taxi service for your tenants; etc.

  4. Only if by doing repairs they do more good then damage. If I had it to do over again I would not have done a single repair. The problem with doing repairs is one loses the ability to think clearly about what it actually costs to renovate and tends to pay too much for a property.

    Many times I find myself thinking “No big deal I can fix that issue in a day or two, while the seller is thinking “Who the heck is going to buy this dump? It’s going to take months to fix this place!”

    One of my friends a retired RE investor, always figured high on all repairs, and was able to negotiate sellers down to the numbers he thought would allow for the renovations. Once he told me “I don’t get it, you pay more then you should and then have to work every weekend!”
    I met this investor when I offered $10k more for a 3 unit building then he had offered. It was a steal, but would have really been a steal if I didn’t figure doing $9k of work on it myself.

    My wife sat me down to do the numbers, 8 months to renovate based solely on weekends and time off my normal trade, and $5k in materials. Missed rent of $650 a month or $5200. So in trying to save a buck I paid too much and cost myself $1200. For the favor I got to add all of that free labor. The tenants over the last 5 years wore out most of the nice touches that I added to the place.

    Don’t get me wrong if there is an emergency, I will take care of it, but no more painting or other manual labor. My standards have slipped over the years and no one can tell.

  5. James Pratt on

    I paid an electrician $135 to fix a light switch- my cost would have been $1.
    Paid a plumber $500 to fix a pipe- my cost would have been $30.
    Just got through having a furnace (wall heater) put in for $6000. If it was vacant, would have cost me around $2500.

    I have the skills, these and other things I can do with no problem. Yes vacations can be expensive when it comes to repairs. My renters tell me “you own real estate”, you’re rich, yeah on paper.

    • You have some expensive workers! My plumber charges at most $150 for a leak and I had an entire hvac system put in for $4000 (had space heaters prior).

      It may cost you $1 in parts to fix the electric, but what about yor time? You have to drive to Home Depot, get a part, coordinate with the tenants. Drive to the house and back. To me it costs me more money in lost time than it does to hire someone.

      • James Pratt on

        Mark. I retired many years ago thanks to my real estate investments. It gives me something to do as I am well qualified to fix most repairs. For an example yesterday I fix a faucet and a light that took only 25 minutes. How much would an electrician and plumber would of cost me?

  6. Brandon,
    I think you should add that landlords that have a maintenance crew/team on board, or pay a monthly fee to a management company, should be excluded from answering this question. I cannot see a landlord that is paying someone to do the maintenance job saying, “no I’ll do it myself just because I want to do it, but I’ll still pay someone else for this job.” Also, if a landlord lives more than 1 hour away from a rental, that’s a different story.

    The highest amount I can make right now is 60$/hour, and I pretty much have already planned every hour of the current week (doesn’t mean that I do everything that I have planned, but I know what it is and what is the payment for each hour). Family time is priceless, but I can take my kids with me to a hardware store and they love it (still a family time and they actually learn where the parts come from).

    So for me, it’s a simple math. Plumber – 150$/hour, me 60$/hour, so if I need to choose, I’ll choose being a plumber, but will do it at 8-9pm, so I don’t miss my other job.

    I know that goal setting, planning and working on the business is important, but I can’t do it for more than an hour at a time, I get unproductive and obviously wasting my time and my business time too. Instead of forcing myself to work on the goals, I can do something that gives me immediate gratification (like fixing a leaking faucet or a leaky toilet). Anyway, my best goals setting mind usually wakes up at 11pm, when I can’t be a plumber or do any other job.

    And if I’ve spent the whole day just looking for the next deal, and doing only this, how much money have I wasted if I didn’t find anything and haven’t done anything else. 30 min in the morning and 30 min in the evening is more than enough for me, unless I’m paid to find those deals. So, with 30 min in the morning, 30 min in the evening for the deals, one hour for goals and planning, I still have time for my regular job, my 60$/h job, my family, leaking faucet and a roof each day.

    • I also consider how quickly I can do a job vs. the tradesman. For example, I can earn $70 per man hour in my landscape business and my plumber is $60-$72.50. I also know that no matter how simple, the repair will take me twice as long as the plumber. That’s all they do all day. Me? I have to scratch my head for a minute and think..maybe buy another tool..etc. So my cost is $140 in lost revenue vs. the $70 for plumber.

  7. Brandon – I love this question and expect a ton of comments.

    I wrote a blog on this topic a while back – http://www.biggerpockets.com/renewsblog/2014/02/03/leverage-cash-time-real-estate/

    I don’t think there is a single answer for everyone, but what I often asked people to do is to see what they have more of… time or money. If people have a lot of time and not a lot of money (and they don’t have the skills, wherewithal, motivation to do something else with their time to make more money), then it may make sense to do repairs themselves. When I started my father and I did just about everything ourselves. Not only did this save cash because like others have said I wired the lightswitch or fixed the pipe, but I also learned what it took to do the renovations. Since then and with each property, we focus on doing less ourselves and hiring more out. We do this because our time got consumed but we had more cash, so we can buy back our time by paying other people to do the work. I like recommending this path for people as I believe it sets them up for success in the future once they begin delegating. Like others have said, we also missed out on money when we were doing everything ourselves, such as missing out on several months of rent because it took us longer to do the renovations.

    It is very easy to say “No, someone should not pick up a hammer at all because their time is better spent working on the next deal”, but in reality each individuals situations have to be evaluated. Obviously to grow a successful business a person needs to delegate, but for someone just starting that might not be the most effective strategy.

  8. David Jennings on

    If you enjoy working with your hands why not it gets you away from your everyday grind. It also give you the inside view of your apartment instead of the birds eye view.

  9. Dave Tanner on

    I’m one extreme. I’m the guy that does almost all work and has a box truck stocked with parts and every tool known to man. With only 17 units of my own and buying 1 or 2 props/yr I get slack time when everything’s rented. During slack time I will do some work for another landlord or take on some other jobs. This set up allows me flexibility and the paid work I do helps make up the gap in our personal budget that my rental income doesn’t fill. I was able to leave my regular job 6 yrs ago, because I went this route. For me it works well.

    • Right in line with what I do. Retired from military 8 years ago and now rentals and handyman business take majority of my time. When I have a new property, changing tenants, or an item to fix – including appliances – those take priority and my time is weel spent working on my owne units, atleast for now!

  10. Sharon Tzib on

    I think the second choice should be “sometimes when they have the time and knowledge,” because even if I had the time to do repairs, I certainly do not have the skills to fix a plumbing leak or an electrical problem. In fact, I might make it worse. I do have enough knowledge, however, to speak with tradespeople about the work they are proposing and can figure out pretty quickly if I am being scammed or over-charged.

    This question illustrates the advantage of buying newer or renovated properties too, so that you have less repair issues to deal with in the first place.

    • A faucet would leak even if it’s brand new (less than a year) if you live in an area with hard water. In my own house where I have replaced all faucets to really good quality moen ones once we moved in, I have a leaking faucet practically every year. Well, I do have a lot of faucets and moen ones have a life time warranty.

      It’s maintenance, like cleaning gutters (it doesn’t matter if you buy old or new, maintenance won’t go away). I have installed gutters guards, but still need to clean every year, but gives me a chance to see how the roof is doing.

  11. I do all the maintenance myself. I manage 13 units including 3 for my father. Once things have been done right maintenance is just that and pretty easy. I enjoy working with my hands and solving problems. My tenants appreciate the fact that I will get my hands dirty to serve them and I believe that has contributed to low vacancy rates and ease on that side as well. I like being able to see the property and get ideas for great value add improvements as well. I just had a property in which i needed to rebuild the exterior stairs for the upper unit. I shrunk up the kitchen windows on the lower unit first and was able to add another kitchen cabinet and dishwasher for a very low cost but at the same time adding tremendous value. There are some projects like windows and roofs that I won’t do. Those projects do not go along with my adversion to heights for long periods of time :). I also like having those projects done in a day as opposed to a long fdrug out process.
    Like others have mentioned, I also have slightly more time than money currently. I am not ready to purchase another property right now (unless a great deal comes my way again) as I am doing a lot of work to my personal residence purchased a year ago. I am also getting windows and a couple other medium sized projects done at other properties. I took on a lot the last couple years so this year will be firming up the base so I can spring into more properties next year. Also my wife will be much happier if I take care of the stuff at home first and that is priceless :)

  12. If I am going to pay someone $50 – $100+ per hour, I would rather it be myself.

    If you are making well over $200K, hire it out.

  13. Mark Langdon on

    For me it depends on my tenant status. I usually bring my rentals up to a very good condition so I get very few calls. If they are living there I always hire out as I feel once I go there they will say “Can you fix this thing also” or get a to do list. If it is Inbetween rentals (vacant) and I am not busy I don’t mind saving some money and getting it back up to proper condition myself fixing items vs. hiring it out while I am securing my new tenants. I think the correct answer depends on where you are at in your real estate career and what you like doing and what you hate doing. If you love fixing things and you have the time; why not ?

  14. I think it depends on their true capability and whether or not they are the owner. When I was a landlady I would call on a handyman or contractor in a jiffy. I would be adement at the tenant not to attempt any such work on the property and even had it in the lease. I would not ever proclaim to be a handywoman or contractor. If I so choose to do such work in my house where I live that’s one thing but no way would I do it to rental property. Landlords that aren’t licensed contractors should leave it to the pros. Just because you are a male doesn’t mean you were born with the knowledge of licensed plumbers, electricians, carpenters, HVAC etc. Its tax deductible so make sure those you hire have FEINs beforehand. I realize many landlords don’t consider themselves real estate investors as they have day jobs and just want to have additional income from one or two properties. Which are usually a triplex at most and maybe a SFR in addition. Still its a business whether they know it or not and should be treated as such. Great article, Brandon.

    • Arthur Banks on

      I haven’t read all the posts, so I don’t know if anyone said otherwise, but I’m not sure this has anything to do with being a male. I like repairing things because, well I like repairing things. And I don’t think I know how to fix things because I’m a male. Heck, I even stopped for directions before gps existed. =) Not everything has to be contracted out. That’s the reason Home Depot, Lowes and Menards exist, for do-it-yourselfers. Now, if my day to day business operations consisted of “deal making” activities, my answer might be different.

      • Nothing to do with being male – I enjoy fixing things too (‘course Google now thinks I’m male & 55-60 years old because I keep looking up plumbing parts & researching stuff on car forums!).

  15. My wife and I have done many rehabs so doing small repairs seem like a breeze and therapy compared to some rehab challenges. My career in construction has given me the knowledge to fix almost anything. When you modify electrical and plumbing I do think you take a legal risk if something happened to your tenant verses hiring it out and being a third party. Even though some would argue about odds, you could be sued for a lot if you perform the repair and a court finds you at fault.

  16. For the most part I say no.
    I can see a few circumstances off the top of my head where it makes more sense.

    1) You are a “small time” landlord with only a couple places and have no desire to acquire a lot more. If you aren’t using that time for “deal making” then maximize the return on the ones you have. Assuming you have the basic skills to handle minor work.

    2) It is your “other” job. If you are a GC then you probably aren’t going to hire out your repairs and maintenance. You will do the work you do at cost and will have guys on your crew do the low end handy man stuff for you do keep them busy when you don’t have as much for them to do. Managing your own places is another debated topic of the savings in money vs. the savings in time, but you probably aren’t farming it out if you happen to own a property management company. Same idea.

    3) You just really like doing that stuff. If it is something you take great joy in then it is a leisure activity not a cost saving move. Some people enjoy doing that kind of work and take a lot of pride in doing a good job. If that is you then do any work you are skilled enough to do (while being smart enough to hire out things beyond your abilities). However if you are only doing it to save some dollars hire it out. It is one thing if you like doing it and do it in lieu of some other activity and think it was fun. It is another if you work full time and you spend several hours doing stuff you hate on the weekends rather than spending time with your friends and family just to save a few dollars.

  17. I see quite a few folks on here suggesting to use the services of management companies. My experience and that of other landlords in my market is there are no good management companies. What I have found is these companies want to collect rent, leave units vacant for months on end, and pad the repair bills, as well as try to sneak in unwarranted charges. At one time I was under the false notion that I would be able to lay on the beach while a management company did simply sent me a check each month. Actuality, I have to take management back and when these units become a burden sell them all. I am a small landlord with only 15 units, formally the number was 20, but sold a few during the run up to the bubble bursting.

    • I’ve seen much of the same thing Dennis, especially in regard to the tendency for “managed” properties to have long vacancies and then leasing at below market rates. I manage all of my own properties and can usually lease a unit in 3-7 days at top of the market rents. I regularly see similar “managed” properties linger on the maket for weeks/months before they are leased. I’m having a tough time finding the value in property management companies.

  18. I don’t know how you could hire everything out while starting out. The only person I can afford is me but you need to know your skill set and value your time. Sometimes I find myself trying to repair something when I should replace it. You need to know when to fix it, when to replace it and when to hire it out. Your business should be blended not set in stone.

    • Jimmy Coffee on

      I will maintain one foot in both camps ( DIY and Hire it Out). Where possible, I invest in new mechanicals (Water Heater, Appliances, A/C) on my rentals as part of the initial make ready. I have found that the initial cost for New is generally less than the cost of one or two service calls.

  19. Agreed. The fine art of knowing when to put in new, when to make do.
    As a new rental owner I’ve found it tempting to “over-improve”, though since I’m fond of Craigslist I’ve managed to keep the cost down with high end materials at better-than-cheapo prices.
    I did need to do most of the rehab work myself, but I actually derived a great deal of satisfaction from it. There were times, especially at the end of a 12-14 hr day when I sat exhausted with my feet dangling down between the floor joists where the subfloor had been, looking through several rooms worth of stud walls where the drywall had been, with wiring & switched hanging loose, and wondered what the HECK I had gotten myself into. As the house got reassembled, drywall back up, subfloors & flooring down, paint on the walls, blinds on the windows I was really satisfying to think back to how it had been transformed back into an appealing, light-filled place to live.
    As I’ve added various things (storage shed, swamp cooling system, etc) it has become a nicer and nicer rental, and my tenant quality is improving. No guarantees, of course, and things do wear out, but I’m hoping to keep gradually upgrading (the neighborhood will support that), to keep it an appealing place to live in/rent. I want my tenants to feel like they are the luckiest renters in town, and like they have a fantastic deal that they don’t want to give up.

  20. Good for you Brandon.

    You’re smart enough to know that travel expenses to and from rental properties are tax deductible. The tools you need can also be a tax deduction whether you purchased or rented them if they are used for your business. And, you can have a second vehicle, a van perhaps, for your business and get even more deductions.

    The average landlord needs every single tax break they can get IMO. And, most people are more capable than they realize.

    Lot’s of good comments.

  21. Maintenance is a part of your business. If you don’t understand how it works, how can you tell if your being ripped off? You may not want to do maintenance forever but if you don’t take the time to know your own maintenance, at some point I believe you may be hurt financially. Maintenance is a growth and knowledge issue. Like a W2 you may want to stop working a 9-5 at some point but you don’t stop day one. Maintenance seems to be the same. Some day you may out grow it but until you do save your money gain some knowledge. Then you’ll be prepared for the day! Time vs money saved.

    Besides some people golf, some fish, and some do maintenance and enjoy it.

  22. Good article Brandon. My personal decision is to do repairs myself when I can do them competently and quickly. I can make a lot of money working overtime in my day job, but I might go insane. it is high stress and my profession is very prone to heart attacks and strokes as well as being overweight. I enjoy getting to take some stress out tearing out a wall or replacing a window. My wife calls them therapy houses. I also do not have good enough deals to pay for all repairs at retail price. It is over a $1,000 to have a plumber replace a water heater. I can do it myself in an hour or less for under $400. The longest part is usually draining the old water heater and getting someone to help me carry it out. I recently bought out my partner in a real estate company and the cost of the extra payment makes cash flow VERY lean. So I even roofed a house last summer. I also tend to over fix. That stops quickly if I do it myself. It would be nice to not have to do any repairs myself, but saving money for new acquisitions takes a long time.

  23. As for electrical, in Maine, it’s illegal for an unlicensed elecrician to so much as change an outlet or light switch. If discovered that a property owner did his or her own electrical work, and a disaster happened as a result, it would completely remove any protection an LLC or liability insurance afforded them. In the real world, I’m sure it’s hard to prove but I don’t fool with fate like that. My electrician is $35 an hour, and is a stickler for detail. He gives me that rate in exchange for paying him “next day.”

Leave A Reply

css.php