One of the most important jobs of a property manager is recommending when to repair and when to replace an owner’s appliances. Although installing a new appliance can have a hefty price tag, depending on the age and repair history replacing the appliance may be the best long-term financial decision and the best solution to meet the tenant’s expectations of functioning appliances.
We are all familiar with this dilemma when we have a car that is getting old and needs an expensive repair. Should I spend $1000 bucks on a repair because I need my car now? Even though I expect there will be another $1000 repair just around the corner? Am I better off cutting my losses and buying a new car? The same decision process exists for appliances such as water heaters, HVAC systems, stoves and ovens or other items.
In the car scenario we usually have an expert mechanic confirming that repeat expensive repairs are necessary to keep the car running.
What about appliances? As an owner of rental property, your
property manager should be the expert for you. Through the vendor (plumber, HVAC Tech, etc), the manager will be able to determine the age of the appliance and pull the repair history of the appliance from the property management software.
Here at
Crosstown Properties, we have nearly
two decades of experience managing just this issue. We also have long term relationships with trusted vendors so that we offer reliable, time-tested advice.
Let’s take the example of a gas water heater:
- A tenant submits a repair request for a gas hot water heater saying, “I’ve relit the pilot light several times but it keeps going out. We don’t have any hot water, help!”
- Before I send the plumber I look up the history of the hot water heater in our property management software to see what repairs have been done. The plumber finds that the pilot light is just fine and the thermocouple looks good. Maybe the plumber cleans the pilot, but as far as he can tell the hot water heater is working properly. That’ll be $200.
- Then two weeks, two months, maybe even six months later the tenant submits another repair request: the pilot light has gone out again. This time the plumber replaces the thermocouple and cleans the burner assembly. Now we have about $500 of repairs into the water heater.
- The next time the pilot light goes out – anywhere from a few weeks to several years later – the plumber may say that the next logical step is to replace the burner assembly. This repair will be around $300-$500 and we could easily have up to $1,000 into repairs on this water heater.
To repair or not to repair? The major variable here is the age of the water heater. The older the hot water heater, the sooner the decision should be made to replace it instead of continuing to pour money into repairing an older water heater that frequently requires repairs.
More recently manufactured hot water heaters generally last 8-12 years. So if the hot water heater is around 5 years old then replacing the burner assembly for $500 (now up to $1000 worth of repairs) may make sense – a new hot water heater will cost $1700 to $2200 depending on its location in the house (garage or attic) and the amount of work needed to bring the water heater up to code. However, if the water heater is about 10 or more years old then it might make better sense to go ahead and replace the hot water heater.
There are no absolutes! The repair on the water heater, like your car, may allow the appliance to function perfectly well for years or it might not last much longer at all! Just like car repairs, you want expert advice to inform your decision.
Let us be that expert for you and your appliances!
People often find us by searching “property management Austin,” “rental home management austin, tx,” “property manager near me,” and “property management companies austin, tx.” We’d love to hear how you found us!
It’s no secret that residential real estate investments are likely to provide steady long term returns.
In fact, the average 25 year return for residential investments is 10.5% according to the National Council of Real Estate Investment Fiduciaries May 9, 2019 report (Maverick, 2020).
It’s also no secret that minimizing vacancy between tenants means fewer days of lost rent – one of many factors in maximizing returns on your residential real estate investment. An attentive and effective property manager knows this and will strategically end all leases between March and June to best serve both your investment interests and the renter experience.
At Crosstown Properties we make a concerted effort to have all of our leases end on the last day of March, April, May or June – This allows us to best serve owners’ return on their investments by minimizing both days on market during a sale as well as days of lost rent under our management.
There is a cyclical increase in rental activity during these months which minimizes vacancy between tenants:
Owning real estate is one of the most effective and time-tested positive cash-flow investments. It is especially worthwhile when your investment property is managed by a Property Manager that you trust. Your time is valuable!
Staying on top of utility changes and charges during tenant turnover is one of the many areas in which you should be able to trust your Property Manager. You certainly don’t want to worry about making sure tenants switch utilities into their name on the start date of their lease… We will take care of this for you!
You could lose $100 or more per turnover if your Property Manager isn’t paying very close attention to the service period of the final bill. As an owner you are responsible for the utilities during a vacancy, but the tenant is typically responsible for all utilities as soon as their lease starts. If they forget to switch the utilities into their name on the start date of their lease, utility charges that the tenant is responsible for will show up on the final bill.
During the summer in Austin, TX electricity bills can be high – especially if a tenant keeps the AC temperature quite low. Not to mention that the vast majority of tenant turnovers happen during the summer – these months are busy and paying close attention to the service period of every utility bill cross referenced with new lease start dates could easily fall through the cracks.
It takes an attentive and hands-on Property Manager to understand this nuance in tenant turnovers and to make sure you are not overcharged for utilities.
Here at Crosstown Properties, we have a routine process for paying utility bills to make sure our owners are charged the correct amount. Consider this turnover from last month:
A new lease started on June 1st. The final day of the gas bill in the owner’s name was June 12th with a balance of $49.42. With a 15-day service period, that means the tenant was responsible for 12 out of 15 days and the owner responsible for only 3 days!
We divide the final bill by the number of days in the service period and multiply by the number of days from lease start date to final bill date to correctly charge the tenant for the days after their lease start. This is how we ensure that our owners are not overcharged on utilities during turnovers!
People often find us by searching “property management Austin,” “rental home management austin, tx,” “property manager near me,” and “property management companies austin, tx.” We’d love to hear how you found us!