help: sensitive tenant with HIGH maintenance cost

21 Replies

Question:  

#1 What to do with a "sensitive" tenant who is requesting a lot of maintenance on my property which is being managed by a property manager?

#2 How do I know if this is due to a "bad" property, poor rehabing, or if this is just part of routine maintenance?

#3  What can be done with property management and/or tenant to mitigate these repairs?   If not, then what are my alternatives?

It's been 9 months since I bought my first investment property and I was reviewing the maintenance cost.   I'm getting around $129.72/month.   My monthly gross rent is $1195/month.   So that's close to 11% maintenance expense per month.

I'm assuming that this is not terribly high in terms of total cost.  However, the frequency of maintenance cost is really alarming.   The tenant has asked for repairs approximately 2-3 times a month consistently for the entire 9 months!

It is currently being management by property management and I did not have any role in finding this tenant or involved in any manner regarding these repairs.

Several of the repair requests are due to electrical problems but it also ranges in problems with disposal, add freon to air-conditioning, Porch fiberglass panels blew off in high winds, etc..    So far most of these problems seem reasonable.   Maybe the tenant is not "sensitive" but really on top of any repairs required?  But then the frequency of requests should decrease, no?


I want to be proactive before the annual lease renewal.   Do I wait and see- one more year with this tenant.  What can I do to better assess the situation better?

I have 5 other properties, all of which have not had the frequency of repairs that I have faced with this property.   

What was the condition of the property prior to you purchasing it??

From what you are saying these are legitimate requests from the tenant. It sounds like the frequent requests are not the tenants fault but the condition of the property causing ongoing repair issues.

Can't say 100% as I am not there. There is a big difference between a nagging tenant for ticky tack things and real repair issues.

No legal advice.

I think your best bet is to visit your property and see what kind of shape it is in and be hands on.

Joe Gore

@Joe Kim Possibly post tenant requests & resolutions for board's review? No one can tell you exactly what's reasonable or not as we're not familiar with the property, but the resolution may help to put the repairs in context.

You may have tenants that want every fine detail fixed. My first tenants were like that. I fixed what I thought was reasonable and basically punted on the rest. Many of the "defects" were things my own property has and I live with every day. They have learned that I'll discuss items with them but do reserve the right to fix discretionary items.

So you've paid about $1200 in repair and maintenance issues for 9 months she's been there?  If you assume minimal repairs for the remaining 3 months, you're under 10% of gross rents for annual maintenance/repairs. What did you budget for?

Some years will be better than others.  That's just the nature of house repairs.  Starting out with a newly rehabbed rental sometimes helps keeps costs low in the beginning, but not always.  What did you start out with?  Was the property inspected and repaired or rehabbed?  Or did the PM just get it up and running in order to get someone in there? What are these garbage disposer issues and what are the costs?  Where I am I can install a new one for the price of 2 plumbing service calls.  Was the HVAC serviced before the tenant moved in? You're saying she's called in maintenance requests more than 20 times?  Are any of these issues things that could be considered tenant repairs?  If so, you can write your next lease differently.

Make sure repairs you do are only done once, eventually stuff runs out to fix that the tenant isn't causing, hence the tenants are at fault.

Thank you for all the helpful response.

I bought the home from a rehabber who usually does a great job- so called "turnkey".

New flooring, brand new appliances, fresh paint, etc.   Also, he pretty much takes care of all the items found during home inspection.  So maintenance is usually expected to be around 5% which is what I'm seeing with my other properties I have bought from him.

I understand that some rate of routine maintenance is expected but the frequency of repairs is really what bothers me.

Not to be pessimistic, but does the PM take care of the repairs? Is there a possibility that he/she might be making a little extra cash on the side by having all these things fixed? Especially since you're not there, it wouldn't be too difficult to "enhance" expenses. Hope this is not the case, but you just never know - check it out.

Hi Joe,

Assuming the unit is turn-key and in good shape then it sounds like you have a particularly picky tenant. Here are a few tactics that I have used to deal with similar issues in my own rentals:

1. Contact the tenant and let them know that each year rental amounts will be increased to cover your own increases in property taxes, association fees (if any), and any unnecessary maintenance requests. Stress the issue that the more unnecessary maintenance requests you receive and the more minor items that you have to pay someone to fix, the greater their rent increase will be.

2. Make sure your lease clearly defines who is responsible for what. Since you are approaching renewal time, it maybe a good time to have an attorney review your lease and make those changes. The tenant needs to see in writing what you will cover and what he/she is responsible for. Then make sure property management keeps to this policy. 

3. Going along with the above point on modifying the lease, set up a co-pay program for maintenance requests. Tenant pays $50 for a call out, but you handle legitimate repair costs. I guarantee you'll get fewer requests :D

On another note regarding property management. Is property management sending you photographs of repairs (before/after) and copies of receipts? Are you giving them free reign on making the repairs, or do they have to get the okay from you first? If any repair is going to cost more than x dollars they should need your written permission in advance. They should also have conducted a thorough walk-through inspection at time of tenant move-in (with photographs) so you know of any potential problems at that time, and so you know if something was damaged by the tenant after move-in.

If the tenant is picky but pays on time every month then consider renewing with the above considerations. If the tenant is picky and pays late, don't bother renewing, find someone better. 

Sorry, but looks like you've bought a property with a incomplete or shoddy rehab.  So, instead of buying a property in good condition, you're paying for all the remaining work in the form of maintenance.   Electrical problems, loose panels on the porch, low freon in the AC are all things that the tenant didn't cause and that should have been resolved as part of the rehab.  Disposal problem could be the tenants making.  And, without a more detailed list, its impossible for us to evaluate the other things.

Have you discussed this list of repairs with the seller?  Is the PM the one the seller put in place as part of the turnkey package?  Have you actually inspected the house yourself?

Originally posted by @Chris Kennedy:

... Stress the issue that the more unnecessary maintenance requests you receive and the more minor items that you have to pay someone to fix, the greater their rent increase will be.

...

The approach in this quoted excerpt will have the desired effect of reducing tenant maintenance and repair requests because the tenants do fear increases in rent. It will also have the side effect of necessary repairs getting ignored by the tenant since asking for the repair will lead to a rent increase. Imagine what that little roof leak turns into ...

Is the property manager sending you pictures of what needs to be fix? Well, he/she must should send you a brief summary of what it was repaired, the prices, and pictures.

Make repairs that are reasonable, and this will give a better sense of the situation.

  • 1.To cover your increases, you should raise the rent at least 5% percentage, and this should be stated on the lease. Make sure you budget !
  • 2.Disposals should be fixed one time by the owner. After second time and on the renter should be responsible for repairs. The same scenario applies to a clogged tub by hair (Anything that is cause by the tenant, must be pay by them).

If the renter pays on time, I do not see why not to renew his/her lease. Just make sure you stated an increase on the rent, and any repairs that the tenant must be responsible for. 

Originally posted by @Steve Babiak:
Originally posted by @Chris Kennedy:

... Stress the issue that the more unnecessary maintenance requests you receive and the more minor items that you have to pay someone to fix, the greater their rent increase will be.

 "If you ask me to fix things, I'll raise your rent" sounds pretty questionable from a legal standpoint.  I'd stay away from this one or at least contact an attorney before going there.

Wm

I invest in distressed properties that get rehabbed prior to renting.  My year one issues are always higher than years 2 on.  No amount of rehab will put a house through it's paces like someone living there full time.  I have learned to test things better during rehab to get them fixed in the beginning...slow drains, etc but still, my year one tends to be higher.  Once things get fixed, and fixed right they pretty much go away.  For the first tenants that occupy a rehabbed property, I let them know that the first one is on me and after that, if the newly snaked drain clogs again, it is on them...at least the $50 copay amount in the lease and if we find products in there that don't belong, potentially the full amount.   I have had needy tenants before but nothing like what you are describing.  Hard to tell if you just got a bad rehab or a picky tenant or most likely a little bit of both.  Either way, fixed right, most issues won't come back quickly without tenant causing issues.

Joe Kim quote:

"I bought the home from a rehabber who usually does a great job- so called "turnkey".

New flooring, brand new appliances, fresh paint, etc."

If I had a nickel for ever time I have heard this........... : )

Slapping some cheap lipstick and calling a property "turnkey" when it has no tenant history of performing or the expensive repairs have not been completed is laughable at best.

Is an old car "turnkey" when you put new paint on it and shine the tires to make it look pretty?? NO

It looks good and runs for a little while but then what is lurking under the carriage and hood starts going bad. Then you either dump the car for a loss or start throwing a bunch of money at it to keep it running.

Turn key would be a gut up rehab job where everything is new. Most of these operators selling this stuff can't do that because the age and value of the property would be exceeded for what they could sell for if they fixed everything.   Paint is cheap, flooring is cheap, appliances are cheap. The KEY is the expensive items that are not repaired can sink your whole investment today and in future years. Did you do a cost reserve stable on this property?? Who is the home inspector?? Is it someone you selected or a crony of the "turn key" company who might get paid to look the other way on a few things??

I am not saying anything as I know nothing about this company just general things to watch out for and that you see from other posters on BP time and time again who buy these turn key properties.

@William Hochstedler  I very clear stated "unnecessary maintenance requests" - such as being called to replace a light bulb. Our lease states very clearly what I will and will not cover, from day one the tenants know what they are expected to maintain themselves. This is explained up front before move in. Having said that, we also are clear about what maintenance we are responsible for (that includes major things like roof leaks, plumbing, appliances, etc) and our PM company has a 24/7 emergency phone line. 

My main point is that you need to set expectations with the tenant, and having them think twice about costing me $50 for an unnecessary call out is no bad thing.

@jon 

@Jon Holdman  I agree - seems like the property was not as "turnkey" as it looked. 

The other point is that some tenants are more needy they others.  They are quick to notice and ask for repair on items even small things and want the repairs now. It is important to set standards for this in terms of response time, frequency,  and contact methods.  If this house is running a lot higher then others and the calls are more frequent you could just talk with the tenant as you are approaching renewal to set expectations. Ask for items that they have concerns about. If it is a lot of little stuff it might be cheaper to just send someone once.  Then suggest that now that you have the kinks out you wouldn't expect as frequent calls but if there is an important repair that needs to be made she should of course contact the PM.  Also outline the repairs that are not your responsibility (i.e. we don't change lightbulbs).  I have to admit we don't treat all requests equally, and minor items do wait.  I know not everyone agrees with that but urgent repairs are more costly and I would like to know if a repair is made urgently it really needed to be made then.  Pay that after hours plumber when you don't need to drives up costs.

Originally posted by @Joe Kim:

Question:  

#1 What to do with a "sensitive" tenant who is requesting a lot of maintenance on my property which is being managed by a property manager?

#2 How do I know if this is due to a "bad" property, poor rehabing, or if this is just part of routine maintenance?

#3  What can be done with property management and/or tenant to mitigate these repairs?   If not, then what are my alternatives?

It's been 9 months since I bought my first investment property and I was reviewing the maintenance cost.   I'm getting around $129.72/month.   My monthly gross rent is $1195/month.   So that's close to 11% maintenance expense per month.

I'm assuming that this is not terribly high in terms of total cost.  However, the frequency of maintenance cost is really alarming.   The tenant has asked for repairs approximately 2-3 times a month consistently for the entire 9 months!

It is currently being management by property management and I did not have any role in finding this tenant or involved in any manner regarding these repairs.

Several of the repair requests are due to electrical problems but it also ranges in problems with disposal, add freon to air-conditioning, Porch fiberglass panels blew off in high winds, etc..    So far most of these problems seem reasonable.   Maybe the tenant is not "sensitive" but really on top of any repairs required?  But then the frequency of requests should decrease, no?


I want to be proactive before the annual lease renewal.   Do I wait and see- one more year with this tenant.  What can I do to better assess the situation better?

I have 5 other properties, all of which have not had the frequency of repairs that I have faced with this property.   

Hi Joe:

I have the same issue. As some already stated, things can come in waves. It's tough to say what is up with your tenant. However, the contract I use has a provision where you can say the tenant pays the first ____ dollars of each repair. I had thought about putting a small number there, like $10 or so, thinking it may help smooth things out. I haven't done it yet, but thought I'd throw it out there to see what you and others think.

I have that provision in mine set at $50.  I have only used it twice and since I handled the matters myself, it cost less than $50.  Other issues have typically come up early in my ownership of the property and as I mentioned above I covered those items since I recently bought and rehabbed the property.  I am fortunate in that I don't have many issues after the first year or so with my properties.  Earlier this year, a property with a crawl space (I owned this one for 3 years) had a plumbing issue.  The pipes to the bathroom did not freeze solid, but did have chunks of rust and buildup break loose from the inside and clog the shower.  I paid the full bill to get that fixed and did not ask for the tenants $50.  4 months later at the same house, the same shower started leaking due to a warn washer.  Same thing, I paid $100 for a plumber to go out and replace since I was too busy to do myself and still did not ask for $50 from my tenants.  Perhaps I am too nice and letting money slip away but these tenants are not needy and I primarily look to use that $50 copay as a means to deal with needy tenants.  

As I get bigger and busier, perhaps I will enforce that more.  For now, I am loathe to think about someone not calling me about a water leak because they don't have an extra $50 that month.   

In a landlord friendly state it often easy enough to just tell the tenant "no". In a tenant friendly state you may just want to resort to a no-fault eviction under some reasonable alibi.

@Chris Kennedy I completely agree that a good lease should set responsibilities with as much detail as possible.  There are also gray areas such as pests (particularly in multis) and garbage disposals.  Policies for these things are a very good idea.

If a tenant calls for a light bulb request or any other item that is their responsibility, simply bill them for the maintenance call.  We do it all the time.  If there's a dispute, you're dealing with a bill not a lease.

It's the idea of tying the frequency and type of these requests to rent raises that might be problematic.  No lawyer, but the tenant may have a case for constructive eviction.  I wouldn't want a judge deciding what repairs are necessary or not.

Unfortunately, the issues posted by the op are not so cut-and-dry and require soft gloves. Your lease should provide for the tenant to conduct an inspection prior to move-in and complete a checklist at which point the property is delivered as-is.  It may be as easy as pointing this clause out to them and assuring them that they won't be charged for the issues, but no repairs will be made at this time.

Or you could have the PM co send someone out to do a walk-through with the tenant and make a complete list of all the issues with the prop.  Decide what you will and won't fix and be up front with the tenant about it.  If they can't live with an outlet that doesn't work, you might have your answer this way. 

So, certainly have good lease policies about repairs as Chris suggests.  Also, a good property management company should do a thorough intake inspection (and have the tenant to do one as well) whenever possible so these are not surprises to the tenant or owner after the fact.

If your management co doesn't have good policies for ALL of these things, I'd start interviewing.

Wm

If you have 5 properties and one with 11% maint cost... that doesn't seem bad.  You are better off having a tenant calling the PM for maint rather than neglecting some of those repairs.  

I have some properties that require more maint and management. If those were the only ones I owned I will be upset.  I look at my portfolio rather than individually.

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