While there are many duties you can delegate, this article will discuss the value and process of delegating maintenance duties. Let’s start by looking at how this has played out for me.
Delegating Maintenance Duties: A Personal Example
For many years, our company has outsourced our maintenance needs. Recently, however, we’ve realized that we need to reevaluate how we handle maintenance, especially as we continue to grow. Even though we love our current maintenance man and value his work, there is only so much time and energy he can spend on our properties. So, we entered a process of due diligence to evaluate whether we should add an in-house maintenance position.
A large part of our due diligence process was looking over our maintenance budget. As we evaluated our yearly expenses, we realized we could probably self-perform maintenance with extra capacity left over. With this discovery, we began to ask the question if it was worthwhile to create an in-house position and if such a position could add value to our company.
To answer these questions, we then investigated the cost of adding a W-2 employee to our business. After running through a cost-benefit analysis, we decided a new W-2 position made financial sense. More than financial sense, however, we realized that taking maintenance in-house could result in additional benefits. For example, an in-house maintenance employee would help us gain more control over our properties, which I find incredibly valuable. A side note here: I think it’s important to be involved (though not nosy) in a tenant’s space. This includes changing air filters, consistently checking the condition of the property, and ensuring that every maintenance need is met. I think this level of involvement can add to the long-term quality and value of a property. If we are able to understand the current condition of our properties, we can be proactive in preserving and/or improving that condition for years to come.
Once we decided it was worthwhile to create the in-house position, we then started looking for the right employee. We eventually found a young man named David (name changed for privacy) who is a family friend and is interested in learning more about rental property management and real estate investing. Now, as we prepare for David to join our team, there are some expectations that we’ve established together. Below is a list of some of these expectations.
- We want David to build rapport with our tenants and develop a cordial, friendly relationship with them. We want our tenants to be comfortable when David is in their space.
- David will be working to ensure that our units are fully functional and in good repair. This includes minor repairs and painting that would be typical for a “handy man.”
- David will assist us with unit turnover and minimizing downtime between tenants.
- David will help with preventative maintenance. This would include changing out HVAC filters on a regular basis.
- We want David to help us keep an eye on the overall condition of our properties. Please note, I do not want to be a nosy landlord, but I do want to know if a unit is mistreated or if lease guidelines are violated. Since I made a capital investment on each rental property, it’s important to me that units are respected, and tenant/landlord expectations are upheld. Here’s a list of things that we will have him check:
- We want David to check for specific areas of damage in a unit, including holes in doors and/or drywall, roof leaks, water leaks, etc. By catching these issues early, we are able to uphold our financial responsibility to manage our units well and provide quality repairs for our tenants.
- We want David to observe the exterior of the units. Is the lawn mowed? Are the driveways stained? Are there any issues with the gutters? How is the soffit? If any issues do come up, we can address them accordingly.
- We want David to check for prohibited objects. If he notices any swimming pools, swing sets, or trampolines, we want him to notify us. All of these items are prohibited in our lease for insurance purposes, so it’s in our best interest and the interest of our tenants to address these items if they come up.
Again, please note that David and I worked together on the expectations outlined above. Personally, I think it’s important for both of us to communicate our expectations to each other and for David to feel a sense of ownership over his employment. Beyond what’s listed above, David and I also discussed the potential of his responsibilities and benefits increasing in the future, which outlines some forward progression for him.
When it comes to your company’s maintenance needs, you may not require an in-house employee, but it may be worthwhile for you to enter a similar process of due diligence to see if delegation is worth it. Let’s take a look at that next.
To Delegate or Not to Delegate:
Like many important decisions, deciding whether or not to delegate maintenance duties requires a thoughtful process of due diligence. To aid you in this process, I’ve outlined some steps below.
- Define how you currently handle maintenance.
Maybe you have a maintenance background and you’ve been servicing your rental properties on your own. Or, you may outsource your maintenance needs to a local company or professional. Further still, you may be looking at the possibility of making maintenance an in-house expense. In any case, you need to begin your decision-making process by first defining where your business is currently at.
- Evaluate your current and future maintenance needs.
Look over your portfolio and the condition of your rental properties. Do you own older homes, which typically require more maintenance than newer homes? Do you anticipate a big cycle of upcoming repairs? Do you plan to expand your number of rental properties? Depending on your answers to these questions, it may be worthwhile for you to adjust how you handle maintenance.
- Look over your budget and run a cost-benefit analysis.
Look at what you currently spend on maintenance (including quality of life) and estimate the cost of hiring additional help. If you are considering a different maintenance approach, run it through a cost-benefit analysis to see if it would add value to your company.
- If you decide to change your maintenance approach, make the appropriate adjustments.
If you decide that you need to hire someone (either in-house or external), start asking for recommendations. If you find someone you’d like to hire, sit down with him or her and outline the job expectations together. This may include creating a maintenance schedule, introducing him or her to your units, discussing your management style, etc. Whatever change you decide to make, be thorough in making that change.
Hopefully, after you address the steps listed above, you’re able to reach a level of delegation that works for your company. Even if you decide that nothing should change, you can at least have a good understanding of how to delegate in the future.
In Summary:
- Sometimes it can be helpful to delegate your company’s maintenance responsibilities, especially if you are experiencing (or anticipate) a season of growth.
- Delegating maintenance duties can help you maintain the quality of your properties. By being proactive in your maintenance, you are more likely to increase the lifespan of your units.
- As you decide whether to delegate maintenance duties, I recommend going through a process of due diligence to help inform your decision. Regardless of what you decide to do, a process of due diligence can give you a healthy understanding of where your company is at.