I don't want deferred maintenance issues coming back to bite me in the end. So take $5 and 5 minutes to fix something now, or take $500 and 5 hours to fix something later. The former is better than the latter.
I would never, ever implement a "deductible" policy with my tenants for repairs. What happens when you have a deductible on your insurance? You get into a scrape, you don't report it to your insurance company so your rates won't rise. Same thing with tenants.
We have a policy that the tenants take care of the first $100 or $150 of any repair no matter what. We feel it makes them more responsible and take care of the place better. The only time we may waive the first part of the repair is if the repair constitutes a upgrade to a system, such as a new boiler, water heater, etc.
The other way to keep the costs down are to learn to do them yourself. Get handy fast!
I do all my own repair & maintenance to keep cost's down. I don't have a 9-5, so I have time & it keeps me from getting as big as a house. For wear & tare, I fix at my expense , an accident by a tenant I'll fix at my expense because it keeps good will...Abuse they will fix or live with it.
Anything beyond normal wear and tear gets charged to the tenant.
I don't agree with the 'deductible' for all repairs as it will eventually lead to the tenant not reporting issues, deferred maintenance and possibly bigger issues down the road. I want issues addressed ASAP.
If something fails, its good to have a handyman you can call for minor fixes. Get referrals for skilled trades from other investors
All of the above are very good comments and to combine them by charging the tenant a set amount (as per contract), have the work done by a professional (unless experienced like George Carr), and inspect the work as to maintain the integrity of the property.
I do quarterly inspections. When I go I do these things
Check under sinks for even small leaks. Faucets as well let them run a little while to see if leak.
I bring the proper sized air filter with me on the quarterly visits as well that way I know it's changed at least once every 3 months.
Rest is mainly just visual inspection to make sure they aren't tearing up the place as well.
In summers I do drive bys when it makes sense to ensure they are keepin the yard cut regularly as well.
Unless its something they caused to break by misuse I pay for it as I want them to report it as soon as there is an issue as I had a friend do first 150 on tenant and he found that small things would just go unfixed because they wouldn't report it.
I agree fully with @Bryan H.. I've never gone that route of having tenants be responsible for the first $x of maintenance. For one I don't want them just not reporting something because they don't want to pay for it, and two I don't want them doing their own fixes. Not everyone does good work and I don't want to risk having a more expensive fix later or more damage because of their shotty work.
I always use property managers and I've found the best way to keep costs minimum is to have an awesome manager with killer connections for good work for low prices.
I don't want deferred maintenance issues coming back to bite me in the end. So take $5 and 5 minutes to fix something now, or take $500 and 5 hours to fix something later. The former is better than the latter.
I would never, ever implement a "deductible" policy with my tenants for repairs. What happens when you have a deductible on your insurance? You get into a scrape, you don't report it to your insurance company so your rates won't rise. Same thing with tenants.
You must be new to the rental business. Lets say that 2 dollar fridge you put in the rental went out you expect the tenant to fix the fridge that is yours.
@David A. I am a fan of the quarterly inspections, drive-bys (non gang related, ha ha ha), and if you break it you fix it. If it is normal wear and tear, I authorize my PM to take care of it.
We do yearly inspections and take care of all small things at that time. If we lived closer (out of state rentals), then quarterly would be better, but once a year is a good goal when you're traveling. It saves us a lot of money in individual visits from the property manager's people, and we usually catch many things the tenants don't care about, drainage issues, moisture damage, etc., before they become major issues. We do not have any sort of deductible as we agree tenants would let too much slide, but if it is their fault, we charge it to them. We also let them know that small things like light bulbs and filters are their responsibility, but we check filters at inspections and replace them if they haven't. Apartment renters are used to management changing light bulbs and filters, so we found it necessary to explain that we weren't coming out just to replace a bulb.
Perform the repairs yourself and spend the few extra $$$ on quality items. I'd rather spend the time and money upfront to harden a rental then having to deal with $30 faucets after 6months use etc...
I am a contractor , all damage caused by the tenant is time and materials paid by the tenant . The tenant is forbidden in the lease from doing any repairs . I had a tenant once added some ceiling fans and tried to give me a bill for his labor and a hefty mark up on the fans . He was month to month , The bill was like $ 250 , so I told him " I am thinking of raising the rent $ 200. a month " He decided he didnt want to be paid for the fans , funny thing he is still there today 16 years later great tenant .
I don't like this concept as I found that in general; if the tenant thinks they will have to pay anything - they always put off calling for the repair. As a result by the time I got the call to go over there - a simple leaking toilet flange had turned into a whole new bathroom floor and a new ceiling in the room under it.
Originally posted by @Darren Sager:
We have a policy that the tenants take care of the first $100 or $150 of any repair no matter what. We feel it makes them more responsible and take care of the place better. The only time we may waive the first part of the repair is if the repair constitutes a upgrade to a system, such as a new boiler, water heater, etc.
The other way to keep the costs down are to learn to do them yourself. Get handy fast!
Prevention via inspections, timely maintenance, and having the place in tiptop shape when they move in. Rarely do things just go bad all at once. Starts out a drip then...
All damage is charged to the tenant. Wear and tear gets paid out of reserves and if properly funded is more than enough to pay for normal wear and tear.
I know landlords spend lots of time figuring out cheap fixes and trying to cut down on things they pay for out of pocket but the biggest expense of most landlords is vacancy. Spend your time learning how to retain tenants and how to minimize turnover time and that will put enough money in your pocket to hire out the rest.