How to Make A Multi-Year Maintenance Plan
For Your Buildings
Every landlord is also a maintenance manager. The day we pick up the keys at the notary is our first day on the job. If we researched buying Real Estate before making a move, very few of these hours are spent learning about building maintenance!
Is it any surprise that this aspect of investing is a struggle for many new landlords?
Here are a few things you can do to simplify building maintenance.
The Building Inspection
Maintenance begins with the pre-purchase building inspection. The inspection report is like a general medical check-up. When you purchase a building, one of the conditions of sale (hopefully) is having the property inspected by a professional. This service costs money, but the takeaway is normally a fifty-page report with photos and maintenance recommendations. A good inspector will also place time frames on the issues he or she identifies.
A report is a tool you can and should use to negotiate a lower sale price.
But don’t put that precious document in a drawer and forget about it!
Use your building inspection report to prepare a maintenance schedule. The inspector will flag issues in the report, coding them according to the level of urgency.
You will them listed as follows:
- fix immediately
- fix within the next year
- will need repair in one or two years
- keep under surveillance
This report is actually a blueprint to plan and budget for these repairs. It does the work of planning timelines for you!
Make a Plan
How do you turn the report into a plan?
Create a spreadsheet or print this form.
Follow this guideline in order of priority:
Before or Immediately After Closing
- Fix any major issues that are not up to code (wiring, plumbing and fire-code violations).
- Address items that are a risk to tenants (missing guard rails, electrical issues, doors that don’t lock properly etc.)
- Fix or replace leaky plumbing, caulking, and insulation. Fix any water infiltration.
- Address ventilation issues (bathroom fans that don’t work, humid crawl spaces etc.).
- Organize a biannual check-up in spring and fall.
- If you have a flat roof, get someone to inspect it twice a year. Make sure no leaves have accumulated. Make sure the roof drains are free and open. Add or spread out any gravel as necessary.
- Check and empty the gutters.
- Check the caulking on the windows.
- Check the basement and/or crawl space. Check the humidity levels and look for any water infiltration.
- Check all bathrooms and kitchens. Look for mould. Check the grout and silicone seals to make sure they’re watertight. Look under the sink and counter to make sure there are no slow leaks. Check any fans and ventilation.
As Per the Inspection Report
Fix any issues in the following order:
- Water. Fix any existing water leaks or infiltration that involve the building’s shell (windows, brick, roof, foundation, etc.). If you don’t have the budget for a permanent solution, patch what you can. Keeping water out is important while you save up to do the job properly.
- Plumbing. Consider installing a backwater valve if there isn’t one. Make a plan to replace any galvanized or lead piping.
- Structure. Address any structural issues with the help of professionals. Serious structural issues progress slowly. Although you need to formulate a plan to fix such issues, water leaks and infiltration are more pressing problems.
- Electrical. Have any electrical concerns been checked by a licensed electrician? If in doubt, pay for a written report. Electricians will provide a list of recommendations and/or a certificate attesting that they verified the installation and found it acceptable. Put this in your files just in case.
- The shell. If major repairs to the building’s shell are required, get estimates for a proper job. Figure out how you’re going to finance this work even if you can put it off for a few years.
- Other systems. If any of the building’s other systems (heating, AC, water heaters, etc.) show signs of inefficiency, have them checked so you can plan for what might happen if one of them decides to conk out.
Once you’ve determined your priorities, you can make a multi–year budget. The spending plan will allow you to save up through the winter so you’ll have money for expensive jobs that need doing over the summer—or vice versa.
Talk to the bank to obtain a line of credit with the lowest possible interest rate. You can sometimes get blindsided by expensive problems at the worst possible time. Avoid putting big expenses on a high-interest credit card when you’re in a pinch! Shop for a line of credit with a better rate before you actually need it. Banks are more likely to give you a better rate before you max out your cards or fall behind on payments.
Access to cheap credit is a kind of insurance policy. You don’t have to use it, and it costs you nothing if you don’t, but you’ll be very happy you have it when you find yourself in a tight spot.
Review your maintenance plan every quarter. Check off repairs that have been done and add any new issues that have come to light. A building is like a living organism. New issues appear as it ages. Cold, heat, pests and precipitation can cause different symptoms and weaknesses.
Treat your investment as you would a patient of yours: keep his chart up to date and verify vital signs on a regular basis. This is the best way to make sure things don’t get out of hand and turn into full-blow diseases.
Sample Maintenance Plan
The following is a copy of the maintenance schedule we use for our properties.
Building Maintenance Schedule Date:_________________________
- 6 months
- 1 year
- 2 years
- 3-5 years