Repair or replace
Covid-19, this pandemic has changed the way we live, the way we make decisions and how we make plans for the future. One question that has not changed is should I do a repair or just replace something. It has changed the time it takes to execute this decision. With the effects on the supply chain, parts for repairs can take weeks instead of days to get and new appliances that used to be reliably in stores now are back ordered for a month. With the #1 reason a tenant moves-out being that maintenance is not taken care of, this puts landlords in a tough spot.
We have started to actually carry some things in inventory that was not necessary in the past. It may become the new normal at least to be able to protect ourselves from something similar in the future. Now the question is, do I carry repair parts or replacements.
To do this we have to take into consideration how old, if the repair is just a band aid and in the long run it will be cheaper to replace it than repair it, and how long can you expect something to last. The biggest 2 areas that we often have to make this call are for appliances and roof repairs.
In this day in age, appliances are often better to replace than to repair. For example, a refrigerator is expected to last 12-14 years. A new one can cost between $900-1200. To repair an icemaker, it can be $600 or more. Dishwashers only cost $350-$450. Getting a repair under $250 is difficult. Rarely do appliance repairs last more than a couple of years before failing again. When it is borderline, go new.
Roofs are an interesting problem. Roofers always want to tell you to put on a new roof. A roof is expected to last 20 years. They don’t always make it that long but can often last an extra 5 years. We use trusted partners to do yearly roof inspections to head off roof leaks that shorten the lifespan of the roof. Checking for nails that are lifting and boots & vents that are failing or leaking will save a lot of money in the long. Not only will the roof last longer due to water not compromising shingles, The decking underneath will not rot and need replacing when you redo the roof. Other damage can add 20-30% onto your roof replacement cost. We have also soon people add up to 4 layers of shingles on top of each other before replacing everything. No. Just no. A couple of signs to look for if you are having roof issues or could soon. Brittle or molded shingles that are slippery to walk on means they are near the end of their life. At this point, they almost crumble when you step on the or hold a piece. The roof line dipping at any point often means that there is water damage underneath. Dark areas of the roof that don’t look like they are from trees could also be signs of water damage. It is probably time to replace when you see these things.
While doing the cheap repair may feel good in the moment, keep in mind that maintenance problems are the #1 reason your tenants leave. If it becomes a recurring theme, they will leave. No matter how much you think you saved, vacancy is always your #1 expense. Happy tenants take care of your property and stick around. Saving your way to a vacant property is a losing business model.
A final note that we can’t stress enough is to find vendors that you can trust. We have enough work orders that we get to vet our vendors regularly and follow up with our tenants on satisfaction. If you don’t have that much maintenance, ask for referrals on groups like your local REIA. Google works to find vendors, but they are often way overpriced. Google finds the vendor with the best SEO, not necessarily work.