How To Manage & Mitigate Home Repairs For Investment Properties

[Justin Bullock]

“How To Manage & Mitigate Home Repairs For Investment Properties” by By Justin M. Bullock, Real Estate Developer, Investor, & Realtor®

It is all too common where I see investors getting hit with additional expenses for mitigable and unnecessary repair items.

From starting my career in property management to now owning several real estate companies and operating as an active investor, developer, and real estate agent, here is some of the best advice I can give you from direct experience regarding how to mitigate and manage home repair costs:

Conduct Routine Inspections:

Where my best advice (for numerous reasons) is to hire a reputable property manager to help manage your investments, at a minimum ensure you have someone perform routine site inspections at all of your investment properties.

Every quarter to six months, their job should be to follow a comprehensive checklist to check for exterior and interior issues such as plant & tree overgrowth, wood rot, roof or plumbing leaks, electrical issues, window failures, and all other key items which may affect the integrity of the properties and structures you may own.

The manager should also routinely check with your tenants to see if they may have any potential issues to report.

Schedule Routine Maintenance:

Account for all required home maintenance items which require routine services such as termite bonds, lawn and pest services, pressure washing, HVAC servicing, septic tank pumping, etc., and work to have these items scheduled in advance. You also want to ensure you have these routine services properly coordinated with tenants to mitigate trip charges or unperformed work.

Obtain Property Insurance & Home Warranties:

It is strongly advised to insure your properties against unanticipated, yet inherent risks. You never know what type of unexpected events may happen where having property insurance can help to offset major costs. If your home is older or may be close to being due for mechanical, electrical, plumbing, appliance, or other potential policy covered upgrades, using home warranty insurance products can also help offset some of the costs for certain unexpected failures.

You will want to shop your options to see what makes the most sense for your situations as prices and coverages for these products may vary in each market area.

Inspect & Upgrade New Assets:

Each individual and property has different circumstances surrounding them which may affect potential outcomes and possibilities. You can consider liquidating or exchanging homes that may be in your portfolio which may be looming repairs or choose to use loan products or capital reserves to repair and upgrade these items.

When acquiring new assets for rental purposes, it is advised to have a comprehensive property inspection performed by a licensed professional. Based on the inspection report(s), you should account for completing all necessary structural, roofing, mechanical, electrical, plumbing, and cosmetic repairs and/or updates, along with all other items which may help potentially mitigate even more significant costs and headaches in the future.

Hire Reputable Contractors:

Want to know a surefire way to lose money on your investment properties? Hire unreliable or unlicensed contractors to perform your repairs. I am considering writing a book about the advanced strategies some contractors will employ to take advantage and extract as much money from you as they possibly can on your projects. It’s the sad truth.

This is why it is imperative to partner with reliable contractors who operate with integrity, who are qualified with the right licenses, insurances, and experience that it takes, and who pride themselves on delivering quality results.

You need the work to be done efficiently and cost effectively. Losing valuable time, having to have recent repairs redone all over again, or experiencing other failures which can happen from shoddy repairs can all come with significant financial costs.

Where you should understand the associated practices in how to properly manage contractors, if you do not have the experience, working with others who have positive track records of success and who may be willing to help teach you is a solid and positive start.

Hold Capital Reserves:

Where you can be as preventative and proactive as you want, if you are going to invest in real estate and own rental properties, you will always need reserves to account for planned and unexpected repairs alike (in addition to planned and unplanned vacancies). Trees fall, qualified tenants may bail, lightning strikes, water leaks, and sewage happens!

Always make sure you have the finances you need to hold on when things get tight, as this principle applies deeper than needing money in reserves simply for just repairs.

Thank you for taking all of your time to read this. I appreciate it and hope this information helps aid you in a positive way as you move forward in your real estate endeavors.