HELP! Dealing with PM and Tenants that abuse maintenance calls
NEWPORT BEACH, CA · Member since 2018 · 9 posts · 6 votes
HELP! Dealing with PM and Tenants that abuse maintenance calls
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y@Dimitri Wilson most of these look like valid complaints on the surface: lost water, no heat, frozen water pipes, water damage in the bedroom, toilet leaking, etc.
I just took over management of 24 units that the owner was "managing" on his own. He's constantly complaining that he can't afford the vendors I'm sending over but I'm sending them over to deal with water leaking from toilets, water leaking through the roof, frozen pipes, furnaces going out when the temperature is -15, no hot water, sewage backing up into showers and sinks, etc. I'm not just doing this for the tenants; I'm trying to protect his property from further damage!
Would the water leak cause damage to the home? Is there a problem with mice and cockroaches? Did the pipes freeze? Is it an old water heater and furnace that could use new parts or possible replacement?
It sounds like you have an older, lower-class home that needs to be maintained. You can be proactive and fix it up or you can react every time something breaks. Either way, these things don't fix themselves.
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- Investor · Tempe, AZ · Member since 2018 · 1k+ posts · 731 votes7y
Hi @Dimitri Wilson,
I am curious on the relationship with the management outside of maintenance issues. Did they find good tenants? Are they good at communication? Were their rates low, fair, or higher than market?
My suggestions would be:
- Hire Home Inspector: Have them provide you a home inspection report of everything that is wrong with the house. This could also be a handyman as well, pay for his 1-2 hours of his time and have him create a list of everything he would correct.
- Minimal vs Major Issues: You have a responsibility to your tenants to provide a livable space, if something prevents that from being livable then it's a major issue. No heat during the winter is a major issue. Tackle all the major, or potential major, issues from the list your inspector/handyman provided.
- More is more, not less: If you continue to spend as little as possible, you're putting a band-aid on severed limb. Often the right solution is spending more money to replace the unit or address the entire issue. If the toilets constantly leak every few months then replace the toilet! It'll be nearly the same labor time to remove/replace a toilet as it would to replace the interiors or remove the bowl to tighten other screens. And toilets only cost $100! Same goes for appliances, if it's going to cost more than $150 you might as well replace the unit. And new is always best! It has a warranty and in theory a longer life expectancy. Plus there's the benefit of having newer appliances and that helps justify increased rents.
- Consider Your Basis: When investors go after the cheapest out-of-state properties they typically fail to acknowledge that lower class tenants and properties have more issues. Older buildings, older appliances, etc. Next time you purchase a property and work on the proforma, acknowledge that CapEx should not be a standard percentage. Often you'll see people reference an industry norm for CapEx rates. That completely fails to incorporate the rental rates and conditions of the property. A plumber is going to charge $75/hr regardless if it's a $500 rental or $2,000. Unfortunately the lower your NOI the higher CapEx ratios become. That's an issue with cheaper rentals that most ignore until they're in a similar position as you.
Best of luck!
- 7yMike D'ArrigoPro MemberTurn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
@Dimitri Wilson I can see why you are alarmed. By my calculations, that's $3261.84 in just 5 months! No, this is not the norm and doesn't have anything to do with being a C class property. It's a little hard to tell what each of the repairs are since the descriptions are not complete, but the majority do not look like they could be tenant related. How did you buy these properties? Did you have an inspection done at the time? It looks like it has a ton of deferred maintenance and CAP EX. For routine maintenance and repairs, we project 5% or $500/year on our pro forma's and that's usually pretty accurate.
- 7yNed J.Pro MemberInvestor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
Need more details to be sure, but on the surface it does seem excessive.
Some of the stuff looks like deferred maintenance...... repeated calls about heat, hot water etc. If there are real issues with the HVAC or water heater, its stupid to pay $200-400 for each repair over and over...just an expensive band aid that only buys time but cost you $$ in the long run.....better to bite the bullet and replace the item. The PM should know that....
Appliances....it rarely pays off to spend more than $200 or so to fix a fridge, stove, freezer...... better to just replace them at that stage.....PM should know that...... approving $800 worth of fridge/freezer repairs ina 2 week span is stupid....PM should know that....
Pests...if you have repeat calls on pests..... need to get to the source of the issue which is often tenant hygiene..... and better to address that and hire a monthly service for prevention. Your lease and state laws dictate how much you are on the hook for pests vs the tenant post move in. Again, paying $100 o whatever for every time the tenant see a roach or a mouse, is dumb in the long run....again, your PM should know that....
Some or all of these could be legit....but when there is a pattern, you need to get to the source of the pattern and stop the bleeding, not put a band aid over it. The issue may be deferred maintenance or a PM that says "yes" to everything and moves on to the next issue...not their $$. Sometimes when they have the power to just approve any repair under $X, they just do it and move on without thinking of the big issue.....
You need more details....
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