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Property Management Blog

Repair Issues with Your Atlanta Area Rental Property

Video Transcript:

Hi, Todd Ortscheid here with GTL Real Estate, wanting to spend just a bit of time this week on a frequent topic we talk about, which is repairs on your rental properties. It’s a big topic all the time just because it comes up so much in what we do on a day to day basis here in taking care of your properties. Rent collection is probably the biggest thing we do and right behind that is repairs and maintenance.

So a few different things I wanted to go over, the first was getting estimates. When there’s either a cosmetic issue or a non-required repair, something that we don’t have to get done right away, or maybe there are several different options for how to get a problem resolved, then a lot of times what we’ll do is we’ll get you an estimate.

For example, let’s say you have a problem with the air conditioning system at your house. A lot of times, what the vendor will do is give you two different options. He’ll say, option A is I can fix this problem temporarily and it’ll probably recur in 6-12 months and that’ll cost $400. Or I could replace the whole system and that would cost, say $3,500. So they give you an estimate for each different option and let you pick which one you want to do.

So that’s just an example of where we might do estimates outside of just cosmetic work. So when that happens, you have to understand that there’s a time limit on that estimate. We sometimes get in these disputes where a vendor will issue an estimate. Let’s say, an owner wants to get a fence put in the back yard of their house just to increase the property value and make it more desirable for renters. So we’ll send a vendor out and do an estimate on that. And they come back and let’s say it’s a $3,000 job. So the owner says well, let’s hold off on that.

And then a year goes by and the owner calls back and says you know, I’m ready to get that fence installed. We call up the vendor and he says well, labor rates have gone up, lumber is more expensive right now. It’s now a $3,300 job. Sometimes we get an owner who’s a little bit upset about that. Unfortunately, estimates are really only valid for a short period of time. Different vendors have different times on that.

I can’t give you an exact timeline on, this is always two weeks or whatever it may be. But generally, if you’re going more than a month out, you can pretty much guarantee that that estimate is no longer considered locked in because things change. Especially right now with this current economy, labor rates are skyrocketing, especially for low skill labor, different material costs could be changing because of the tariffs and everything that are going into place, so there’s a lot of things fluctuating. Prices can vary a lot. So if several months have gone by since you received an estimate, you pretty much can guarantee the estimate’s going to change somewhat, so it’s not locked in at that point.

So if there’s something that you want to get done and you like the price that you’ve been quoted, you probably want to go ahead and get that done and not delay it for too long because at least in the way the economy is right now, the price is likely to be higher a year from now than it is right now. Inflation in Atlanta right now is averaging about 3%, which is a lot higher than it was just a couple of years ago when it was pretty much flat. So, that’s an average value across all goods and services. Some things are a lot higher than that. So you want to lock in a price, if you like that price and don’t put it off too long. If you think you’re getting a good deal, don’t wait if you don’t want to risk that price going up.

The other thing I wanted to go over is warranties. How long is a job warrantied at a property? This will vary, depending upon the work done. A lot of that is because of the materials warranty. An air conditioner will have a different warranty period on it than say, a plumbing fixture, you know, a faucet. Some faucet companies will give you a lifetime warranty. Others will give you six months. So it just depends, as far as the materials. The materials warranties can vary a lot, even on the same item. Usually the more expensive it is, the better warranty you’re going to get.

Usually on rental properties, you’re not throwing the most expensive stuff in because tenants tend to damage things. So usually you’re not going to get that lifetime guarantee part put in the property because it’s just not cost-effective for you, since the labor won’t be warrantied to replace it even if the part is guaranteed for life. The labor is a different story. Usually, our vendors will warranty their labor for 6-12 months. That’s generally what you can expect when they’re doing work on your property. So if they go out to do … Let’s say they replace a toilet at your property and three months down the line, it’s leaking because there was something done wrong with the installation.

They’ll go out and they will take care of that free of charge. But if they go out and replace your toilet and two years later, it’s leaking at the base, that’s probably not something that they did. So we sometimes have owners trying to get us to pressure the vendor to warranty this work several years after the work has been done. Vendors don’t warranty stuff that long. Even the materials don’t get warrantied that long, usually. There’s very few things that have that long of a warranty. So we’re not able to guarantee it for that period of time.

But if a vendor goes out to your house, does some work and a few weeks later, if the problem is right back again and it’s the same issue, the vendor will generally warranty that. We hold them to that. We make sure they’re not charging that. Usually they don’t try. We work with reputable vendors, so they know that they’re not going to be able to charge for that same thing if they’re going back out to fix something that they should have fixed right the first time.

Last thing is repeat trips for the same job. This is kind of different than the warranty thing. This is an issue with how many trips it actually takes to get a job done. So, obviously, vendors aren’t able to keep every part that they need on their truck. There’s just not enough room. There’s just too many different things that can break in a house. So they do carry some of the most common things they deal with. They’ve got some electrical outlets they keep and blinds and some other things that are pretty common that they might have in their truck all the time.

But there’s other things that, obviously, they just can’t and there’s just so many different items. For example, fixing appliances. There are so many different appliances out there with so many different parts. Usually the only thing you can do is order them special order. So what happens in those cases is we dispatch a vendor to go out and diagnose the problem. So they go out and let’s say it’s an oven that’s not working. So they get to the property, they find that there’s a control board on the oven that needs to be replaced. Well, that has to be ordered, so that’s not something they can just pull off their truck and do while they’re there.

So they’ve taken that trip out to the property. That has caused them to incur costs and labor, fuel, everything else that is involved in making that trip, so there’s going to be a second trip when they have to go out to actually install the control board once it comes in from the manufacturer or the third party vendor that’s building a third party part. So they’re going to be making two trips for that repair. It’s the only thing they can really do because they have to make the first trip to diagnose the problem and then because it’s a special order part, they’re going to have to make that second trip.

A lot of owners try to pressure us on that and say well, only charge me for one trip. I can’t find a vendor who’s only going to charge for one trip when it takes them two. Especially in today’s market where vendors are in such high demand; unskilled labor is so high cost. Nobody’s going to do that free trip. So they’re going to charge for going out both times. Now, they might discount the second time. Some vendors might. Others don’t because they know they’re in just such high demand that they don’t have to.

Roofing vendors, you can hardly hire a roofing vendor right now because they’re in such high demand with new construction. So they’re going to charge you for everything they can justify. But sometimes you’ll get a vendor who will kind of discount that second trip. They’ll try to do that for us. But they’re going to charge for both of them, no matter what, just because they have that cost. They’re having to pay an hourly employee to go out. They’re paying for the mileage, the wear and tear, the fuel on the truck that’s going out. And sometimes, they’re having to make trips back and forth to Lowe’s or to the wholesale lumber supplier or whoever it may be.

So if there’s multiple trips involved, generally the vendor is going to charge for those multiple trips. That is a reasonable expense. It’s not something we can pressure them to waive. That’s just the cost of doing business, unfortunately, with having a rental property. So we always bid out our work to try to find you the most reasonable priced vendor as possible. So you’ll usually find that you pay a lot less with our vendors than you would with someone you could find on your own. But we still can’t get those kind of discounts where they’re not going to charge for a multiple trip work order.

That’s just something that they are going to charge for. It’s just part of that business. So I just wanted to clarify those few items. If you have any questions about any of that at all, send us an email and we’ll be happy to answer those questions for you.