High maintenance costs can be catastrophic to a real estate investment business. When you really think about it, high costs of any kind in any business can be catastrophic. Even in our personal lives, you hear stories of families declaring bankruptcy due to high medical costs. I say that to say, this is a problem that is universal. However, I am going to focus on high costs of maintenance as it relates to rental properties. In this article, I am going to provide you 5 tips to reduce your rental maintenance costs.
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Perform Regular Inspections – Performing regular inspections is one of the most effective measures you can implement to reduce maintenance cost. If you can catch a problem before it starts, you are able to control the cost of repairs. You are also able to plan & budget which will help in reducing your maintenance costs.
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Join Groups & Associations That Have Partnerships With Hardware Retailers – There are many real estate networks and associations that have agreements with major hardware retailers so that their members get discounts. For example, I am a member of NARPM, GTAR, and several REIA Groups. Each one of these groups have agreements with hardware retailers so I get a discount when I shop for supplies. I’m not sure if I can combine these discounts for a bigger savings; however, even if I’m getting 10% off for materials, it will help reduce my maintenance costs.
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Create A Syndicate With Other Landlords – syndication is a technical term used when a group of investors pool a bunch of money together to buy an investment property. I believe the same concept would work for landlords who want to pool their purchasing power to get better discounts from maintenance and repair professionals. Real estate investment is like boxing where you are in the ring alone fighting for your financial freedom. However, there is no reason why you need to work that way. Reimaging how we work and think of each other can help us produce creative ways to save on maintenance costs.
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Outsourcing – There are companies that specialize in maintenance and repairs where you can outsource your maintenance operations. I’m sure we all understand why outsourcing our maintenance operations would save us money so I am only going to expand on one benefit. It saves time. If we can reduce the amount of time in our maintenance operations, it will save us money.
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Pay For Quality & Warranty – The old adage you get what you pay for is often true. If you use cheap materials it may breakdown faster and your cost for maintenance will increase. If you by quality, you will pay less in the long term because you will have less maintenance calls. And if you have a good warranty, the cost for repairs will not have to come out of your pocket.
If you follow these 5 tips, you will be able to reduce your maintenance costs and produce a better return on your real estate investment.
