Do any of you do your own repairs?
Property Manager · Passaic, NJ · Member since 2008 · 369 posts · 83 votes
Since I mostly just look and give instructions to the Super, it was a real "turn back the clock" moment for me recently when I was trying to meet an inspection deadline-not enough manpower to get everything done. There I was installing cabinets, painting apartments, etc. I had forgotten what it felt like at the end of each day coming home covered in paint with tired aching muscles.
The most interesting aspect of the whole thing was the psychological effect it had upon my tenants. I suddenly lost my "image" of the landlord that only cares about getting the rent and doing nothing. (Little do they know). As I sweated my butt off and they watched me, they acquired a renewed respect for me and those harsh landlord/tenant lines seemed to fade away.
Ingrid,
I'm glad you earned their respect. However, I never do my own repairs. It's not worth my time....us investors need to always focus on high dollar activities.
We do some of our own repairs. It depends on the job and our time. There are times we do an extensive amout and other times we do very little.
It comes down to: do you have the skills and what are you doing today.
I agree in theory with Jason, but it CAN become an excuse to sit on your butt. For example, right now, we a furiously looking for the RIGHT DEAL to fit our particular needs, desires, and portfolio, but have not found it in a few months. We have a comfortable inventory and a good number of tenants. Thus, we are doing more rehab and minor repairs of late then we have other times or will in the future (I presume).
I look at it as staying busy and profitable. There are many here on BP who will likely make the argument (on this very thread, possibly) of the exact opposite of Jason's position. That is OK. Certainly, if you are handy and skilled, you can save a ton of money by doing work yourself. If nothing else, you are saving on the contractor's profit margin.
That assumes I have the ability to take down every deal I would find doing those "high dollar activities". I don't. So, yes, I'll paint or install cabinets. Or fix a toilet. I'd do more, but I do follow the local regulations that require licensed workmen for some tasks.
A further thought after re-reading Jason's post...
Contracting can be a "high dollar activity."
There is no right answer here - to each his own.
I've almost always done my own repairs, obvious exception HVAC, can't do freon. But even there I know how to troubleshoot so I'm not paying a guy to come out and replace an exhaust fan or thermostat.
1. Assuming you know what you're doing NO ONE else is going to do as caring (or in many cases as GOOD) a job.
2. Sometime when you're bored READ the back label on a can of PAINT, especially a can of primer, KILZ etc. Then ask yourself, "have I EVER seen a painter do ALL OF THAT?"
3. On another rainy afternoon READ the instructions on the back of a bundle of SHINGLES, then ask yourself the same question!
4. Consider the SKILLED TRADESMAN who is $40-$50/hour. Add in his benefits etc and your COST for him is about $100/hour. Is what you would be doing instead of that job paying you $140/hour? That's the amount you would need to earn BEFORE TAXES to NET $100/hour to pay the fee for that tradesman. You're probably not reviewing that many deals.
5. I don't think I ever CONTRACTED a job out because my time was otherwise engaged searching for, researching or closing on other deals. And I've never lacked for deals to do.
frank
I'm young and trying to build wealth. So I do majority of the work. I try to save whenever I can. Eventually, I will pay someone to do my yard work when I don't have the time to do it myself. Right now I have plenty of time and don't mind getting my nails dirty. Most repair work is not difficult, just requires some labor and reading.
I used to do a lot more of it before time became a major problem. Obviously you save money. The other major benefit is reliability - you know you will be there when you told the tenant you'd be there.
Repairs and replacements, no matter who does them, can become costly, especially when they're not expected and not budgeted. In my situation, I have a part-time resident Super and there's no way he can meet the State mandated 60 day deadline alone. Yes I did earn some respect in the process and had the opportunity to finally meet some of my tenants.
I do almost all my own management and maintenance. I don't buy into the concept that you should be spending your time "finding deals" or some other equivalent nonsense. With several dozen rentals, I only work about 16 hours per week, which leaves another 152 hours each week to "find deals", whatever that means. In reality, people call me with most of my deals, and I can answer the phone even while fixing a leaky toilet.
Mike
I guess I have a different take on this whole DIY verses hire it out debate. It would be impossible for me to do the maintenance myself due to distance and number of units even if I wanted to do it; which I don't, thank you very much. I know how to do it, even used to do it about 20 years ago but part of the reason I started investing was to improve my life. Somehow, pulling another stuffed toy out of a backed up toilet just doesn't meet that criteria for me. If it does for you, more power to you.
I guess where I have heartburn is when people claim the ONLY way they can run their investment profitably is if they do it all themselves. That is just bogus and the sign of someone who, well, you get my point.
Some people enjoy the satisfaction of doing it themselves and knowing it was a job well done.
Some people aren't emotionally attached to the properties and see the real value in the tenants. We experience satisfaction in providing a great place to live at a fair price providing a fair profit to the owners.
It isn't really a matter of having that time to find other deals. For me, while my wife was battling cancer for over ten years, it was having that time to spend with her without having to worry about running to do "something" at a property. Now that I am a widower and single parent, it is having that time to spend with my son.
I am perfectly willing to trade a few dollars here and there to improve my quality of life. Great deals come along about once a week. I can always buy more property to increase my income, but I can't ever get back a single minute wasted on anything. And yes, to me, time spent doing the maintenance would be wasted because I could spend it in so many other ways.
It isn't always about the money.
I haven't heard anyone claim that the ONLY way to make money is to do it all themselves. In fact, I have repeatedly said that you must have cash flow with ALL the real world operating expenses included and that you can EARN the management and maintenance fees IN ADDITION to the cash flow.
I agree with that 100%! That is the beauty of the real estate business. If you have an urgent need to spend all your time with family - you can do it. On the other hand, if you want to do some or all of the work, you can do that and earn the maintenance and management fees in addition to the cash flow.
I agree, but how many hours per week can you spend with non-work activities? I ride my bike, my motorcycle, go camping, snowboard, scuba dive, work at Church, and take a 3 or 4 day weekend almost every week. But that still leaves a LOT of time during the week. Working 3-4 hours per day, 3-4 days a week to double the amount of money I make from the rentals (cash flow alone) seems a worthwhile endeavor and no-one will manage or maintain my property better than I can.
Mike
I do all my own maintenance except when it requires a licensed contractor or it is beyond what I can handle. I grew up in a construction family and worked in construction for 5 years so I have a good working background of doing most home repairs.
Like others have said if your paying a contractor $50/hr to do maintenance on your property that you are able to do just so you can sit and watch TV, that's not being very cost effective. Before you pay someone to do it you need to make sure that during that time you will actually be doing something that is making you more than $50/hr for it to make sense.
-Michael
I have always looked at my investments as a long term strategy. I never wanted to just "live off" the income from my real estate or stocks or any investment. I guess in the strictest terms I would have made far more money each year had I totally devoted all of my time to managing and maintaining the properties myself. But, I know if I had done that I would've ended up one of those burnt out landlord types. You know, the ones the kids talk about as they go by his house with him outside mumbling to his garden hose.
Anyway, I kept my W-2 job even after I reached critical mass with my investments because I could. I enjoyed the work and have definitely made a difference in people's lives in the medical industry. Once my wife was diagnosed with breast cancer that difference was tangible and real.
But the biggest reason I did it? Because I knew I didn't have to do it. I still remember the year when I figured out I could quit my job if I wanted and I no longer had to even think about layoffs and such. I also remember the day my boss at the time figured it out. :cool:
I can honestly tell you I have enjoyed every single W-2 job I have ever had since college and I know a big part of that was because I never once had to worry about compromising my principles because I was dependent on a paycheck.
You want real financial freedom? Continue to work when you no longer have to work.
Ok, now look at this. You were working in companies you owned and you don't think an investor should be working on his properties? Don't you see how a person working on investment properties is doing exactly the same thing as you taking a salary from the company you built?
I know in your career, real estate may have been the side activity but in my business it is my primary focus. I don't have nor do I have the intention of creating another business and putting REI to the side focus.
That is the difference. You spent years "fixing the toilets" of your company to make it a saleable company. I'm simply doing the same only I'm not going for 300 employees, I'm going for 300 properties that act as income generating entities.
Tim
Not that you asked, but if you want some insight into my management "style" the book titled Good To Great will explain much of my management philosophy.
Anyway, I don't mean to take away anything from anyone who likes to do this stuff for themselves. I have known many like that. Some even work for me now. :wink:
I guess at the end of the whole discussion it comes down to kind of leverage we seek and how we choose to use it.
At least this time this type of discussion didn't degrade into total kaos.
I just see absolutely no reason for me do the manual labor involved in doing the repairs. I guess if I couldn't find anyone able to do the job at a reasonable price I would give in and do it. Then again, that is kind of how I feel about growing and slaughtering my own meat. I could do it if I had to, but thank god I don't have to do because I can afford to goto the grocery store and buy it as I need it.
And yes, to me it is about taking away time and attention from doing those things I find far more profitable than swinging a hammer and working up a sweat.
Recently someone asked me if I thought I was too good to actually get my hands dirty and do the work myself. It isn't really that, although I readily admit I went to college and got my degrees in finance and bus admin so I wouldn't have to do that type of labor. The biggest reason is I can hire it done and be done with it. Problem solved and I can move onto the next big thing.
Other things I do not do for myself include...
Flying the airplanes when I travel
Surgery on myself
Filling my own cavities
Cutting my own hair
Making my own clothes
Picking the cotton for those clothes (Ah, no you do not want to go there.)
Tanning the leather for my shoes
Making my shoes
Making my own car
Working on my own car
Building my own house
Growing my own food
Carrying cash to pay for things instead of using the banking system
Running my own water purification system and sewage treatment plants
and on
and on
and on
It doesn't matter if I could do all those things in only 16 hours each week leaving all that other time to do whatever else. The fact is, my time is more valuable than spending it to learn how to do all those things and then going through the menial steps to accomplish the manual labor for them.
Hey, that's just me. I am basically lazy that is why I went to school and invest the way I do.
It's also a matter of backgrounds and timing. I did notice that your tech consulting firm you refer to, you built in the midst of the Dot Com boom. Any fresh graduate with a degree in computer science could become a "consultant" upon graduation during that era. That era is over, though you got in and got out at the right time.
Now is the era of the foreclosure investor and it behooves the foreclosure investor to minimize overhead as much as possible to acquire as many units in this climate as possible. The Blue Light Special will not last forever. This will all turn around in a maximum of 7 years when everyone has a "credit reset" and just about everything drops off their reports. When that time hits, then it's time to sit back and outsource the system - when everyone's paying "fools price" for property again.
Tim
Huh? Don't follow you here.
The consulting group started in 1995 and continues growing to this day. The dot com bust happened in 2000/2001 and we were still growing high double digits before, during and after that time. While the consulting group was high tech it was not part of the hysteria of that time.
I sold the majority of my stock in the fall of 2003 but remained on the board of directors until the summer of 2006. I still do some consulting with the board and the executive team there. By the end of this year they will be twice the size they were when I sold my interests and a good 25% larger than when I left the board. I remain a very minor shareholder to this day.
I believe? that he's saying that if I rehab a kitchen that I'd pay a contractor normally $8000 to do and choose to do it myself for $2000 and my time, that I am giving the government 35% of my $6000 profit instead of writing off that $6000 paid as a repair cost/capital improvement.
Doing your own repairs vs. hiring out is a personal choice. I don't find fault with either. For myself, however, I don't normally make $200 an hr. in my full-time profession. Therefore, if I know how to gut & rebuild the kitchen, have the time, make the time, etc. I earn the $200 an hour instead of my contractor.