Wallace offers some good information on maintaining rental homes. If you do property management what type of reserve do you hold for each property? I do not manage, but will perform a rent up service and check and job history.
I've received several calls from investment property owners who want to change their property managers. I learned A LONG TIME AGO that this becomes easier each time a property owner wants to change so these new owners rarely stay around long
These property owners both had rented properties that were not being kept up. I asked them how much money their property manager was holding to take care or repairs and they said NONE. This means that between the time the rent is collected and disbursed to the owner is the only way the property manager can obtain money for repairs, OR the property owner has to send the money to the manager once the bill is received. WAY TOO MUCH COORDINATION and POTENTIAL for vendors not getting paid and the property manager getting stuck with the repair bill.
1. Property managers should have a reserve account for each property or property owner. I hold a minimum of $500 and some properties I hold as much as $2,000 for repairs and ongoing maintenance and bills. This way, vendors get paid after the owner has received their net monthly funds.
2. Property managers need to have service personnel and repair resources whether in house within the PM firm or a list of authorized vendors who have the appropriate licenses and insurance. A GREAT place to get these names is from the property owners when you take over the property management duties. Ask them who or what services are familiar with their property and then make note of them for the property file.
3. Having a GOOD understanding with the property owners about ongoing ROUTINE maintenance such as semi-annual HVAC service, gutter cleaning, landscape mulching and exterior cleaning and the timing of their payments keeps surprises to a minimum and anticipating upgrades such as carpet replacement or storm door installation are very important.
4. Having a REPAIR CEILING in the management agreement is also important and that should be uniform throughout the management agreements for all clients. I used to have a $500 repair maximum and have upped it to $1,000 which would be the cost of a new hot water heater that needed to be installed on the weekend. All other upgrades can be handled in advance and ball-park costs obtained for the owner's budgeting.
In the fall, I have the HVAC systems of my properties serviced for winter and the smoke and carbon dioxide alarm batteries replaced. I'll have the gutters cleaned once the leaves are off the trees and before they have a chance to ice up when it starts to freeze at nights.
Owners WANT to maintain their investment property. Having the systems and resources to do this is a very IMPORTANT part of the job of the property manager.
Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.
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