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Four Maintenance Items for Fall

 

fall maintenance

While we all love the season changes bringing sweaters, pumpkins, and football it also brings maintenance requests for pilot lights and roof leaks. Listed below are four maintenance items you should be completing before the temperature drops and the weather arrives. Doing these four things will save you time and money and your residents will appreciate your preparation.

Change Furnace Filters/Check HVAC System

If your units have a central HVAC system, the end of summer is a good time to check your furnace filters. If they are dirty or dusty, changing them is quick and affordable, and residents will enjoy better air quality. As an owner, a more efficient heating system will save you money on energy costs. Be sure to remind residents to turn on their furnace before cooler weather comes. This allows them to air out the ducts while keeping the windows open. It removes dust build-up and ensures they know how to operate it before the year’s first cold-snap. Finally, gas companies will come, check, and light pilot lights for you. They make sure all the connections are secure and that there is no maintenance necessary. Be proactive and make sure your HVAC system is ready for fall.

General Roof Maintenance

When fall arrives, sometimes it brings rain. Roofs that have been baking in the sun all summer long can crack and deteriorate. This leaves openings where water can intrude into your property. Hiring a roofing vendor to do an inspection is a great way to ensure your units are weather-ready. They will look for broken shingles, sealant cracks, and fascia separation. As with HVAC vendors, roofers get very busy once the weather is here. Call early to ensure prompt service. It pays to check this item as water intrusion can be extremely expensive to correct.

Gutter/Drain Clean Outs

In the same vein as roof maintenance comes drain and gutter maintenance. Gutters and drains collect leaves and debris all year long, which can clog and cause major flooding to your property. During your roof inspection, have your roofer also clean out any gutters on the property. This is an easy and affordable option that will reduce the chance of water intruding into your units. Be sure to also clean out any property drains. These are usually located in parking areas or walkways where rainwater collects and is returned to the street’s storm drains. Make sure to clear these before the rain so you are not stuck cleaning them out during a downpour.

Doors and Windows Maintenance

One overlooked maintenance item is weather-stripping for doors and windows. It is an affordable fix that will save you money on heating costs. Check doors and windows for broken or missing weather-stripping during inspections and replace as needed. They will create a firm seal on your exterior doors that keeps out drafts and moisture. Inspect windows for proper seals and broken panes. These can go unreported by residents who are not aware of what to look for. A broken pane or an improperly sealed window can cause moisture intrusion, which can lead to mold. Repair broken windows and make sure they are properly sealed before fall to reduce these risks.

Performing these maintenance items is a great way to ensure your properties are ready for the colder months. They will save you money on last minute repairs when vendors are too busy with other jobs. If your current management is not addressing these items take the time to research what a professional property management company can do for you.

5 Things To Look For On Your Cash Flow Report

Your cash flow report is the lifeline of your property. Knowing how to read it is essential to understanding the overall health of your commercial properties. Listed below are five things you should be checking every month. If questions arise, always contact your professional property management team.

Income

Income pays your property’s expenses, debt service, and wallet when enough remains. Always check your gross income and compare it to trailing months. If it is higher or lower than normal, ask why. A vacancy or a missed laundry check could mean a lower than normal income. Market rate changes, rent increases, or added revenue streams could mean a higher than normal gross income. Either way, keep track and question this amount every month to ensure your property generates the highest possible income.

Operating Expenses

Operating expenses are day-to-day costs to run the property. Fixed, variable, and periodic are examples of expense categories you will see on a report. Expenses paid every month, quarter, or year are periodic. Periodic expenses can also be fixed or variable. Fixed charges remain the same as occupancy fluctuates. Examples of fixed periodic expenses are insurance and property taxes. Variable expenses are those which fluctuate depending on occupancy. Examples of variable periodic expenses include utility bills, pest control, and maintenance. If the variable expenses are significantly higher or lower than average, ask why. If an unusual expense shows up on the report inquire as to what the nature of the expense was and why it was necessary.

Capital Expenses

Capital expenses are permanent improvements that increase or upgrade the value of your property. You should require estimates from several contractors for these projects since they are often expensive. Examples of capital expenses include installation of new windows, a new roof, or replacement of a HVAC system. You should always have a signed contract with the vendor performing the project. Make sure to check these items on your cash flow report to see that the final bill matches the estimates provided by your property manager. If they do not, inquire as to what changed and why.

Below-the-Line-Items

Below-the-line means the items below net income. This section reports items like owner distributions, contributions, prepaids, and accrued items. You should carefully review these items as they directly affect your cash flow. For example, this section reports your monthly distributions, which should match the amount received on your bank statement. In addition, this section deducts prepaid rent. This is because cash paid for a future debt should be reported on the corresponding month’s cash flow statement. If the report lists a distribution that you did not receive ask your company executive for an explanation.

Cash Flow

This is the final and most important piece to the cash flow report. This section is located at the very bottom of the report. It shows your remaining cash after all expenses, debt service, and distributions are paid. Make sure that it is positive. Otherwise your property lost money during the month. The cash flow section will indicate beginning and ending cash. If your cash flow was positive, your ending cash will be higher than beginning cash. Owners should always make sure this amount is high enough to provide a cushion for turnovers, major expenses, and property taxes. You and your property management team should agree upon this cushion by taking into account turnover rates, property age, and property size.

Overlooking any of these items could mean loss in revenue, higher expenses, or even overdrawn operating accounts. Your professional property management team should be recommending ways to increase revenue and decrease expenses to boost your properties overall value. After all, even the smallest changes can have large effects on your bottom line.

Three Questions To Ask Your Professional Property Management

Poor management is the number one reason for property investment failures. After spending significant time, money, and effort securing a rental property make sure those managing it are looking out for your best interests. Many owners do not know what they should be looking for in a professional property management company. Maybe you inherited the property and have not communicated with the company that has been running it for several years. Are you an out-of-state owner removed from the process of daily operations? Or maybe you hired a local company based on the recommendations of your friends or agent. At any rate, the following questions confirm your management company is providing you with the best service.

Do they provide monthly financial statements?

Financial statements are an absolute necessity to understanding the financial health of your property. A monthly cash flow report tells you the operating income, operating expenses, and capital expenses. Reviewing this report every month ensures that all rental income is collected, operating expenses matched yearly averages, and no unauthorized capital expenses occurred. Additionally, your company should be able to answer any questions you have regarding this report. These contacts can take the form of a controller, account executive, or sometimes the property manager themselves.

Do they ask for approval on large capital expense items?

Capital expense items are often large purchases that permanently add value to the property. Many owners have a set dollar amount above which they require approval, leaving smaller amounts to the discretion of the property manager. However, there are many projects for which you as an owner should have final say. Discussing the benefits of the projects with the property or project manager is helpful to understanding why certain expenses are necessary. Coordinating with the vendor(s) who plan to complete the project is even better. This way you can ask specifically how they intend to do it and the costs/options involved. This will help you understand the purpose of potentially expensive capital projects.

Do they provide at least 2-3 bids from separate vendors on each project?

While on the subject of capital expenses, does your management company provide you with at least 2-3 bids from separate vendors? It is typical for companies to have a preferred vendor list. These are vendors they used in the past from whom they receive potential price cuts due to the business they provide. It is always important that managers provide owners several bids. This is especially true for large ticket items where the scope of work and materials can vary. Therefore, if your manager is not getting at least 2-3 bids for larger projects you may be losing out on potential savings!

These three questions are vital to ensuring the success and profitability of your rental property. Requesting these services is as easy as contacting your account executive or property manager. Accordingly, if they do not honor these basic and important services it may be time to look for a replacement.