We’ve all been told things that were presented to us as absolute truths but turned out to be myths. Here’s a classic, “You need to wait half an hour after eating to go swimming, or you’ll get cramps, and you could drown.” Or how about, “Twinkies last forever.” Nope. They have a shelf life of 45 days.
Myths and common misbeliefs usually arise when people take their anecdotal experiences and raise them to the undeserved status of unchallengeable maxims.
Let’s take a look at the top three myths about rental property maintenance.
Myth #1 – Do It Yourself Repairs Always Save Money.
If you’re a seasoned handyman with thousands of dollars worth of tools and mad repair skills, then, yep, doing repairs yourself is probably the way to go. Unfortunately, more than not, an aspiring handyman landlord thinks he has the skills to repair a hole in the roof, or replace a water heater or pour new concrete in the driveway, when in fact, he’s in over his head.
Also, consider the time value of doing it yourself. Even if you have the skills and tools, is it worth your time to spend five hours replacing a busted pipe, or are you better off paying a pro to get the job done?
Botched do-it-yourself maintenance jobs not only cost a landlord more to fix the problem, but they also upset your tenants who simply want the problem solved as quickly as possible. Tenants might choose not to renew their lease if it takes the landlord forever to fix a broken shower head or replace damaged tile in the kitchen because he insists on doing those jobs himself.
Myth #2 – Security Deposits Cover Everything.
What does a security deposit actually cover? Let’s look at misconceptions from both the tenant and landlord points of view.
Tenants often say that the security deposit covers the last month’s rent. I mean, the security deposit is the exact same amount as the last month’s rent, so that’s only fair, right?
Unless the landlord and the tenant have specifically put the provision in writing that the last month’s rent is covered by the security deposit, then no, that’s not the purpose of the security deposit.
Landlords often view the security deposit as funds they can use to make the property ready for a new tenant, especially cleaning and freshening up the property. Wrong.
A security deposit is intended to cover unpaid rent and perform needed repairs or cleaning that result from more than normal wear and tear. A security deposit should not be used to replace twenty-year-old countertops or repaint bedrooms after ten years.
Unless property damage was caused by a tenant’s intentional or negligent behavior, standard wear and tear chores are not covered by his security deposit.
Myth #3 – Repairing vs. Replacing.
This issue cuts both ways.
On the one hand, you’ve got the optimistic landlord who believes, “repair is always better than replacement.” This landlord might have a twenty-five-year-old fridge in a rental unit. When it breaks down, he calls the appliance repairman rather than visiting the local appliance store for a suitable replacement. He sinks $150 in repairs into the ancient appliance.
Conversely, other landlords think, “if it breaks down, get rid of it.” A good example here might be a landlord who would replace a five-year-old HVAC unit because it just went out of warranty and needs $200 in parts. Rather than fix a perfectly good HVAC system, he would spend thousands buying a new unit so that he can “sleep at night” knowing that it’s under warranty.
The truth is this – Before you fix in a frenzy or rush to replace, you should consider the age and condition of the appliance or structure, the expected lifetime, previous fixes, and safety concerns (not to mention evaluating what is specifically wrong, if possible).
The general rule is if an appliance is older than half of its expected lifespan, and the cost of the repair is over half the cost of replacing (note, not necessarily half the original price – there is a difference), then you should replace rather than repair.
Another reason to consider repairing instead of replacing is for tax purposes. The costs of rental property repairs are deductible that year.
If you’re like most landlords, you’ve done some estimating about how much your property should require in yearly maintenance. That’s a valuable exercise, but understand that only one thing is sure about your estimate – it will be wrong.
Most of the time, rental property maintenance and repair costs will be higher than your estimates. 100% of the time, rental property maintenance and repair costs will be more than you want to pay. If your estimates are in the ballpark, say within 25% of actual maintenance costs, then you’re well ahead of the game.
At Sterling Property Solutions, we have a team in place that can answer all your rental property repair and maintenance questions and address any challenges. If you are already a landlord and no longer have the time or desire to handle rental property management on your own, we can help. Maybe your current property management company is not giving you the top-tier service you deserve. If so, reach out. We are there for you.
Please give me a ring at 914-355-3277 or send me an email at Linda@Sterlingpsi.com. Together, let’s create a long-term program for your success.