Protecting Your Investment Property
5 Points to Keep Your Contra Costa County Investment Property Paying
Annual maintenance for a home in Contra Costa can seem reasonable especially when compared with much higher rates across the bay. In general, while rents are lower, expenses related to maintaining and keeping those properties on the market will also be lower. The weather is milder and strain on utilities and appliances is also, generally, that much less.
But nearly every new property owner is going to underestimate the costs of upkeep, damage and just regular maintenance. In general, and depending especially on the age and dimensions of your property, we recommend maintaining a fund of something like on hand so as to be prepared for furnace or HVAC or water heater expenses. But to emphasize, this amount can vary and really depends on the age and expected lifespan of the equipment or utilities in question.
This article is really for the newer investment property owner. Although, it shouldn’t surprise anyone, expenses related to maintaining any property will quickly mushroom, if the following points aren’t followed with a relatively “religious” strictness.
- Service Visits are Inspection Visits
Every time any tenant calls for service, repairs or maintenance, it’s an opportunity to check the property for the list of routine points you’ve prepared beforehand. Hopefully, your property will pass all these inspections easily, but in any event, it’s important to know beforehand what needs to be checked.
- Inspection Visits Should be Announced, and Scheduled with the Tenants
This is a must at the time of lease-signing, but six months down the road, you may also need to remind tenants that the time is coming up. Of course, if your furnace and water heater are accessible from outside the rental unit, it’s that much better, but you’ll then miss the chance to check smoke detectors, and other points of service. If they’re inside the unit, you’ll need to let the tenants know you’re coming and why.
- Inspection checklists can be long
Don’t get the idea from this article that you can get away with checking the furnace and the water heater once a year. Interior checklists, usually for between tenants, can – and should – run to 40 items. Here’s a good example. From guardrails and handrails to bathroom windows and the quality of the caulking, a thorough inspection will include all of these things. Then, you should have a good checklist for the exterior of the building too. This can run to another 40 points, and ideally, should be performed annually, with or without tenants.
- Contractors Will Eat Into Your Revenue Stream.
This is one of the biggest disadvantages that smaller investors face. They simply don’t have the scale to maintain relationships with all the possible – and reasonably priced – contractors working the market. It’s one good reason to work with a property manager. (They’ll maintain those relationships for you!) But if you are going it alone, it’s important to do your research, and work with reputable contractors who will help out with visual inspections while they’re there.
- Evictions, Even for Damages, Are Often More Expensive Than Repairs
Now obviously there are extreme cases of neglect or simple vandalism, but for parents of anyone but the rowdiest of teens, you’re usually better off working with tenants to find solutions so that further damages are prevented. Understanding the problems faced by normally good tenants is usually a lot more cost-effective than a long and expensive eviction process.
In every case, being a good landlord is a lot more work than lots of new investors expect. At the same time, if you work with the right people, you can keep your expenses down, and your investment paying off.