From performing routine maintenance to keep apartment buildings clean to emergency repairs for leaking pipes, maintenance is a major part of property management. In fact, multifamily data research suggests that maintenance is one of the largest costs for most multifamily communities. Maintenance is obviously part of the nature of running a multifamily property, but there are ways you can control maintenance expenses. In this article, we’ll discuss why you might need to reduce maintenance costs and some common strategies to do so.
Multifamily Data Research: Maintenance is a Huge Operating Expense for Most Communities
Property management data suggests that maintenance is one of the top three costs for most multifamily communities nationwide. It is typically the biggest cost after payroll and real estate taxes. Therefore, maintenance is a considerable operating expense.
Maintenance costs are to be expected, but high maintenance costs can quickly eat into profits for your property. As multifamily operating costs increase, profits decrease, which means you may be looking to optimize costs wherever possible. Since many operating costs are fixed, like property taxes, most property managers look to controllable costs, like maintenance.
For most properties, you have a certain budget for maintenance expenses. The exact budget varies, but common strategies for budgeting for multifamily maintenance include:
- 50% rule: 50% of rental income from your property
- 1% rule: 1% of the property value
- $1 per square foot: Allocate $1 for every square foot in your property
If you’re frequently over budget for maintenance, then you may be looking for ways to reduce these costs.
Strategies for Reducing Maintenance Expenses as a Property Manager
There are many different options for reducing maintenance expenses at your multifamily property. You may employ one or more of these strategies to control costs.
One way to reduce overall maintenance costs is to design a thorough preventive maintenance program. It may seem counterintuitive to invest in maintenance to reduce maintenance costs, but trust us. It’s common for properties to have high maintenance costs because of emergency repairs due to neglected maintenance. Multifamily data research suggests preventive maintenance can save your property in the long-run on operating costs.
It’s also important to properly screen tenants. Some tenants have a history of trashing rental properties and misusing their space or appliances. Completing a thorough screening and calling for references from previous landlords can help you avoid higher maintenance costs from tenants that frequently abuse rental properties.
Another way you may be able to reduce maintenance costs at your property is to invest in equipment to be able to handle a lot of your maintenance needs in house. For instance, purchasing a drain snake and a drain auger saves you the expense of calling a plumber every time a tenant clogs their sink or toilet.
Data You Need for Success from Apartment Data Services
You need reliable data to strategize and properly run your multifamily community. Our team at Apartment Data Services helps you get the data you need from your market and competitors to properly position your property for success. From knowing the average market rate for similar properties in your area to common policies at competitor properties, you can find valuable information from our extensive apartment data research. We contact properties in our large national database monthly to provide you with the most updated and dependable data available. Contact us now to learn more and request a demo.