Chicago Multifamily Maintenance and Costs

Becoming a real estate investor crosses many people’s minds over the course of a lifetime. Profit, flexibility, passive income and others are reasons why an individual would consider delving into real estate. But before doing so, one must consider what owning a building will cost over the course of a year and what repairs and maintenance may need to take place. Below are some ballpark pricing for repair/maintenance scenarios for do-it-yourself landlords or delegating landlords. You will save a lot of money as a DIY landlord, and a lot of time as a delegating landlord – it’s your choice.

Painting Units: Once a tenant leaves, it’s likely that there will be scuffs, dings, holes etc in the drywall and paint. This is likely to be considered normal wear and tear and not something a security deposit deduction will cover. So be prepared with extra paint on site to spot paint or completely repaint units when tenants turn over. DIY Cost: $150 per unit, Contractor Price: $600 per unit.

Apartment Prepping: After each tenant moves out, a new one will have to move in if you plan to make any money in this business. For a new tenant to apply to rent your vacant unit, you’ll need to make it look nice. And to make it look nice, you’ll need to spend money. Some of the things that you’ll have to do to get a unit rent-ready are deep cleaning units, cleaning lint traps/drains, changing light bulbs, changing smoke/radon detector batteries, and other misc. things. DIY Cost: $30 per unit. Handyman/PM/Cleaning Company: $150 per unit.

Heating/A/C Maintenance: In Chicago, your property will most likely be heated by a boiler or gas forced air furnace. Both require regular maintenance to achieve their useful lives. It’s recommended that you have these systems reviewed once per year. Most landlords will not have the expertise to evaluate the performance of a heating/A/C system, so this is something you’ll simply have to pay an expert for. Boiler Contractor Price: $200 per visit , HVAC Contractor Price: $160 per visit.

Pointing/Tuckpointing: If you have a brick or stone masonry home which is very common in Chicago, you will have to keep the exterior free of moisture. Over time, the mortar between the bricks or stones deteriorates or flakes off. After enough time goes by, the deterioration can allow moisture to get in and heat to escape. Water is the number one culprit of problems in any home so something must be done to keep it out of the exterior walls. That’s where a mason comes in to repair the cracking, flaking, and spalling problems with your masonry. This is also something you probably won’t be qualified to do yourself. Contractor Price: $700 per year on average for two or three story property sitting on a standard 25×125 Chicago lot.

Clogged Drains: One of the most common problems you’ll encounter as a landlord are plumbing issues. In a typical rental unit, you may have a toilet, kitchen sink, shower/tub, dishwasher, garbage disposal and/or a washing machine. Over time, your tenants will inevitably put things down drains and/or toilets that do not belong there. Hair, lint, band-aids, tampons, paint, paper-towel, food etc. will be dropped into these drains with little care or thought, sometimes intentionally. Like the artery of a human heart treated poorly, eventually your drains will get clogged and your plumbing will have a heart attack in the form of minor flooding or pooling of water. Tenants aren’t typically astute on how to fix these issues, so they will probably call you to come fix the issue. DIY Cost: $10 for draino per drain. Plumber Cost: $50 per visit per drain. More serious clogs will require rodding of the pipes, will cost more and will likely require a licensed plumber.

Leaking Pipes: Over time, your plumbing pipes will leak and to prevent water damage and mold, you’ll have to fix the leaks. DIY Cost: Free. Plumber Cost: $50 per visit per leaking pipe.

Burst or Corroded Pipes: In the winter, as the temperature goes below freezing, your water-carrying pipes are at risk of freezing. As we know, when water freezes, it expands which can cause your pipes to burst! Like I said before, water is notorious for causing issues for homeowners. So fixing a burst pipe is an emergency to avoid serious water damage or mold issues. The common causes of a burst pipe are:

• Turning the heat off in the dead of winter when your unit is vacant in hopes to save money
• Having water-carrying pipes on an exterior wall where there is no heat to keep the pipe warm
• Leaving the hose attached to the spigot in the winter
• Forgetting to switch the heat into your name when a tenant moves out in the winter – the utility company may shut the gas off after months of non-payment
• Normal wear and tear or corrosion on old pipes
• Tenants turning off the heat when leaving for extended periods of time

The cost of repairs for a burst pipe can be very expensive depending on how long the water flows without being shut off – but in most cases can be prevented. This isn’t a very common issue, but it if occurs, you’ll need to hire a plumber. Plumber cost for easy fix: $150, Medium Fix: $500, Extensive Fix: $3,000 (includes property damage and removing/repairing drywall/flooring.)

Snow Removal: The change of the seasons is one of the reasons why the Midwest region is such a great place. But for landlords, it’s another reason why we need to check on our property. The reality is, every time it snows, you should be shoveling and/or salting the walkways, exterior steps and driveways on your property. By keeping these clear of snow and ice, you are reducing the likelihood of someone injuring themselves on your property. The options are to do this yourself, hire a service to do it for you or negotiate a deal with one of your tenants to do it for a discount on rent. DIY Cost: $75 a year for salt. Snow Removal Service $75 per month during winter. Tenant $35 discounted rent per month during winter.

Gutter Cleaning: It’s important to have your gutters cleaned at least once per year to remove any clogs created by falling leaves or debris that accumulates over time. If you don’t clear the debris in your gutter system, a few things could happen. The water can overflow into siding or onto brick and cause wear to the interior and exterior of your property. The water can also overflow onto the concrete below in a concentrated spot and cause accelerated wear on your sidewalks or driveways. The overflowing water can fall around the foundation causing water to enter the foundation and damage the basement. And finally, built up water in the clogged gutters can freeze in the winter and the weight of the frozen water can damage or even detach the gutters from the roof and the exterior of your property. DIY Cost: Free. Handyman Cost $200.

Lawn Care/Maintenance: General lawn care and maintenance is definitely important. A well-manicured lawn and yard will attract the best tenants who appreciate the care you take managing your property. It will also say to non-tenants that your property is being looked after and is not a place to loiter. In general, this will entail mowing lawns, watering plants, picking up loose trash (common in Chicago) etc. DIY Cost: Free. Lawn Care Service $75 per month during Spring and Summer months.

Roof Inspection: Your roof is one of the most expensive parts of your home to replace. So to make sure it lasts the 15 years your roofer told you it would, you need to check it every year for leaks or damaged tar/flashing etc. By checking it every year, you’ll be able to identify water penetration points and fix them before they become more major and costly items. DIY Cost: Free. Contractor Cost $200 per year.

By taking the time, exerting the effort, and spending the money on maintaining your property, you will gain a return in the form of less headaches, less time spent and less overall money spent on your building. It’s not easy to do all of these things consistently, but the best way to get it done is to budget for it and build it into a schedule that you follow. The more organized your process, the less chance there is for you to forget something.

Learn more at my website, www.chicagoREinvestment.com.