MAIN IMAGE: Schalk van der Merwe, director of WeconnectU
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As a modern Rental Asset Manager, you’re undoubtedly well aware of the importance of maximising yield and return on investment (ROI) for your investors. With this goal front and centre, it can be tempting (for asset managers and investors, alike) to focus solely on rental income and occupancy rates, putting routine maintenance and property upgrades on the backburner.
In reality, however, these seemingly less-important tasks can have a surprisingly large impact on a rental property’s short-term profits and long-term value.
In this article, we’ll explore some of the biggest benefits of prioritising routine maintenance and upgrades, helping you motivate your investors to make informed choices that yield lasting rewards.
1. Enhancing tenant satisfaction and retention
We all know occupancy rates are critical for reliable rental property income. We also know that one of the best ways to maximise occupancy rates is to secure long-term, loyal tenants. It stands to reason, then, that keeping good tenants happy should be a priority – and one of the best ways to do that is to provide them with a positive living environment.
Research shows that performing regular property maintenance (e.g. plumbing repairs, general upkeep and maintenance) doesn’t only keep properties in better condition, it also reduces tenant complaints and enhances the overall tenant experience. As a result, tenants in well-maintained properties are more likely to renew their leases, reducing both turnover and vacancy rates.
(As a bonus, tenants also tend to take better care of properties that are well-maintained, minimising avoidable maintenance issues.)
2. Preserving property value
Routine maintenance and upgrades also play a vital role in preserving the value of a property.
Without regular maintenance, properties are prone to deterioration which can quickly escalate, causing extensive damage and requiring costly repairs. This is easily avoided through regular inspections that identify and address minor issues (e.g. blocked gutters) before they become major problems (e.g. interior flooding).
Investing in property upgrades can also reduce repair requirements by bringing fixtures and fittings up to modern standards. More importantly, attractive and up-to-date properties with desirable features (hello, backup power!) attract higher quality, higher paying tenants while simultaneously increasing the property’s market value – a win all around!
3. Mitigating emergency expenses
Not all maintenance and repair emergencies can be predicted or prevented. That doesn’t mean your investors can’t be prepared, though.
By proactively saving for routine maintenance, you effectively create a reserve fund that can be used to mitigate emergency expenses if need be. This valuable safety net means you can swiftly address unexpected issues and keep tenants safe and happy, while also protecting your investor from unexpected financial burdens.
4. Compliance with regulations and codes
The rental property landscape is subject to various regulations and building codes intended to protect the safety and wellbeing of tenants. Failure to meet these requirements can lead to serious fines and other penalties, and even result in legal action against you and/or your investor.
By consciously prioritising routine maintenance and upgrades (and proactively saving for these expenses) it becomes much easier to maintain compliance with the latest regulations. This avoids potentially expensive and/or damaging repercussions, safeguarding your investor’s financial interests as well as their property.
5. Attracting high-quality tenants
In a competitive rental market, attracting high-quality tenants is crucial for maintaining a profitable rental portfolio. Well-maintained properties with modern updates and preferred amenities have a proven competitive edge on the market, attracting more discerning tenants able to pay higher rental rates.
In other words, routine maintenance and updates have a direct effect on the quality of tenant a property attracts, with an equally direct impact on rental income and profitability.
The importance of motivating maintenance to your clients
In the current economic climate, saving is challenging. Investors may be reluctant to allocate the advised 0.5% to 1% of their property’s value for routine property maintenance. This is where your professionalism as a property manager becomes paramount.
It’s crucial to effectively communicate the importance of maintenance and highlight its tangible benefits, including healthy escalations, reduced vacancies, longer leases, higher quality tenants, increased property value and more. Failure to do so not only puts your clients and their investments at risk, it also passes up an invaluable opportunity to improve their yield and ROI.
How to give maintenance the focus it deserves
Let’s face it: getting on top of maintenance and upgrades isn’t just about convincing your investors of their benefits. It’s also about finding ways to incorporate these activities and expenses into your already overloaded workflows and budgets.
At WeconnectU, we’ve developed a powerful solution to solve this challenge (in conjunction with our integration partner RedRabbit). Our platform not only includes capabilities to streamline the management of inspections and maintenance/upgrades, it also enables you to proactively allocate and utilise funds for maintenance via an Investor Wallet.
No more scrambling to catch up on tasks, or last-minute requests for additional funding. Just a seamless end-to-end process that helps you and your investors unlock all the benefits of an optimally maintained property.
