Maintenance Requests & Understanding Owner Goals

Adam,

Once you click “Send” on that work order, you’ve spent (some of) the owner’s money.

Take a listen to this short clip of youtube real estate guy Graham Stephan complaining about his property manager’s maintenance spending:

If you are like me, your head is probably spinning with thoughts after watching that video!

My thoughts:

  1. What does Graham mean by “worth $500” (or $600)?. He may mean the “depreciated” current value? Was this figure accurate?
  2. Was the “bill” the first time Graham heard about this issue?
  3. How old was the broken refrigerator?
  4. What was Graham’s maintenance spending approval limit?
  5. What kind of fridge was it?
  6. What would just the “trip charge and diagnostic fee” from the appliance repair vendor have been if the repair was declined?

Occupied maintenance is complicated. There are the 2 main battles you fight:

Battle #1 – The Owner

Their emotions, finances, goals, knowledge, & stomach for the pains of rentals, etc.

  • Owner’s don’t like surprises. Never surprise them. Call them earlier than you think you should.
  • What is the Owner’s holding period (client goals)? – The client likely doesn’t know
    • At RL Property Management Group, our teams mindset is a 50 year holding period. Obviously not all our clients have this goal. We make decisions assuming a long runway.
    • If your client has a long holding period, your decisions should result in what is best for the property over a long period of time. If short term, do whatever is cheapest.
  • Does the client have future upgrade plans (client goals)?
    • If you need a new fridge, should you buy the fridge that will work best with a future kitchen upgrade?
  • Owner vendor preferences?
  • Written painfully – “warranties”. Pain….

The best course of action is to ask them. I’ve always reminded our team that you don’t have to make any decisions, you can just present the matter to the Owner and work towards a solution with them.

Battle #2 – Handling the Maintenance Request

All maintenance requests from residents should be handled using this checklist:

  1. Try to spend no money
    • Help the tenant fix the issue over the phone
    • Hold the tenant responsible (over the phone) for things that are their responsibility
    • Get the tenant to gather data for you. Age of item, model #’s, photos, videos, data label’s, etc.
    • Call the correct vendor, and ask them for their opinion and cost estimate for the situation. Including trip/diagnostic fee.
    • Hold the need for a future “bundled” or post move out work order if minor.
  2. Check if a work order is already open for this item
  3. Check if there is past data on the item requiring work (Past invoices, warranties, installation dates, work orders, photos, etc.)
  4. Call the owner
    • If anticipated cost is over their approval limit
    • If the issue is complicated, urgent, expensive, or will be an emergency expense
  5. Decide which vendor
  6. Prepare and send a work order
    • Scope is the most important thing. Make sure you take the time to tell the vendor exactly what you want them to do in exacting detail. Define deadline, entry instructions, etc. Don’t skimp here. If you haven’t already, you’ll learn….
    • Call the vendor to confirm receipt if urgent
  7. Vendor/tenant scheduling
  8. Make temporary provisions. Temporary heaters, fridges or air conditioners, hotels, etc.
  9. Make sure the tenant always knows the next step. If they don’t, you’ll have problems, trust me.
  10. Receive vendor estimate, feedback.
    • To the degree your company is capable/willing, review what the vendor is saying (sanity check) to make sure it seems reasonable, comprehensive, and fair.
  11. Repeat #4
    • This time – present all the owners options, and ask if they have anymore ideas.
  12. Finally! – Do the work.
  13. Close-Out
    • Is the tenant happy?
    • Did the vendor get needed permits?
    • Receive invoice.
    • Update owner with a call on any deviations from prior discussions

In Conclusion

First – The cheapest reasonably sized (15+ cubic feet), new, delivered and installed fridge I could find is about $800.

How would Graham’s fridge problem likely have gone if we followed the guidance above:

  • Call the appliance repair vendor to get an approximate estimate ($900) to repair the likely ice maker issue
  • Call Graham to tell him the existing appliance age/condition, and his options to replace broken fridge for $800 or repair the existing fridge for $900.
  • Execute decision

Would Graham still be unhappy about his broken refrigerator. Likely yes. This owner would be forced to see the reality of rental properties, and this may burnish their interest in continuing.

Those who have successfully owned rental properties for many years, using a third party manager know that broken appliances is just part of the life. If you can nicely refocus your Owner’s to this fact, you’ll likely have a happy paying customer for a long time.

Lastly,

  • If Graham’s broken fridge was older than about 10 years, a talented asset manager would have already replaced the fridge before it broke. This is asset management, not property management.
  • Never provide ice makers to your tenants.
Property Management Maintenance