Oh, home repairs… One
of the aspects of rental home investing that can really eat into a landlord’s
financial return. Landlords and tenants both
want to have a perfect home, but debate on who should pay for it.
In 10 years of practicing property management in
Charlotte, I’ve found that the responses of who should pay for what repairs
are unanimous (depending on what faction of people you ask):
Q: Who should pay for
broken stuff at the rental house?
A. The owners!!
(results tallied from 100% of the tenants)
Supporting testimony: “This house is a piece of
garbage! They are lucky I’m a great tenant
and renting it. I pay on-time every
month; the least the owner can do is make some needed repairs around here. I guess Ebenezer is too busy counting his
money to remember the little guy living in one of the houses in his vast real
estate empire.”
Contradictory facts:
House was lived in by owner prior to tenant move-in. Everything worked fine. Actual real estate holdings of owner are 2
houses.
B. The tenants!!
(results tallied from 100% of the owners)
Supporting Testimony: “The house was in perfect condition when the tenant moved
in. I lived there for 5 years and
everything worked. Now they want every
little thing fixed? Who cares if the screen
door has a little rip in it? It didn’t
kill my family, but the tenant can’t live with a flea once in a while? Please!
He doesn’t even have children!”
Contradictory facts: “Little rip” in screen would allow full
grown vulture entry. Perfectly
conditioned homes would be violently offended at this owner’s shoddy home being
placed in the same category as them.
And this is why property management can be challenging at
times.
“To pay to repair or not to repair”, that is the question. And it is one that has no clear-cut answer. But, with that being said, there should be
some methodology applied to make fair decisions.
My take on some parameters:
1. The house must be
kept at code. Major systems (plumbing,
heat, electricity, appliances) need to work properly. This includes working air conditioning
nowadays (I know the old-school hardliners just stopped reading). I’m aware it used to be a luxury item, but
that was a long, long time ago.
2. If it worked when
they moved in, it should work throughout their tenancy (some exceptions apply
on really high-cost or not-being-manufactured-anymore items). Example: a home was rented with a working gas
fireplace. The fireplace stopped working
in the middle of the tenancy. The
manufacturer went out of business for the parts that were needed to fix it. In my opinion, the owner is not responsible
to pay $3K for a replacement fireplace for home that rents for $1K a month.
3. If tenant
negligence clearly causes something to break (example: a bottle cap found
blocking a garbage disposal from working), the tenant should be billed back for
the repair. But a tie goes to the
tenant. Think of this as more of a
criminal trial (where the tenant is innocent until proven guilty) than a civil
trial (only requires a preponderance of evidence). There is a higher standard of evidence
required before a tenant can be billed back for a repair (it must be really
obvious).
4. Operational items
need to be repaired; aesthetic items (aka how the house looks) do not. It should be made clear to the tenant during
the lease signing that the home looks the way it looks now and nothing will be
done by the owner about it.
5. Just because the
tenant is renting the house, it does not mean that they will never spend money
on the house. Maintenance items are
required (air filters, light bulbs, lawn care, etc.) and are not paid by the
owner.
This is obviously not a comprehensive repair policy, but it
is a good start. Good luck!
Brett Furniss is the President & Owner of BDF Realty (Charlotte Residential
Property Management), the trusted real estate advisor for Charlotte
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