Maintenance expenses are far and away the greatest category of spend for any property investor. While that may not seem like the greatest news, the silver lining is that it also means it offers one of the greatest areas of opportunity in terms of how you can optimize your spending to boost NOI.
Because NOI, or net operating income, is a measure of income minus expenses, there are two basic ways to improve the metric. You can either:
- Increase your revenue, and/or
- Decrease your expenses
In this post, we’ll discuss how you can decrease your maintenance expenses in order to increase your investment property’s NOI.
Strategies to Optimize Your Maintenance Processes
- Minimize middle-of-the-night emergencies – You can expect that approximately 1 in 4 tenants per year will call you with a 2 a.m. emergency. Emergencies are never fun and can often be quite serious, so it’s imperative to address them. That said, they can also be expensive, and whenever possible, you want to do everything you can to prevent them. As you aim to reduce your overall maintenance expenses, a key focus should be on addressing preventive maintenance issues so you can minimize expensive breakdowns.
- Invest in high-quality equipment – We know that certain repairs are going to cost more than others, so why not extend the life of those items that will really benefit from being a quality product, like water heaters and HVAC units? Purchasing better quality items means fewer breakdowns and repair expenses, plus there will likely be savings on energy expenses to boot.
- Partner with a property management company – Labor is often the most expensive part of any maintenance visit. Sometimes the part itself amounts to mere pocket change. If you’re spending a couple hundred dollars here and there for one-off maintenance calls that could be handled by a property management company’s in-house maintenance staff, you’re losing out on a huge savings opportunity. Moreover, when a maintenance need does arise that requires specialized service, your property management company already has established relationships in place with reputable and affordable vendors in the area.
Maintenance can often have a negative connotation, but rather than thinking about it as solely a drain on your profit, consider it an opportunity. Challenge yourself to rethink your maintenance philosophy and see where and how you can streamline your maintenance processes to cut costs and improve your NOI.
At RL Property Management, we strive to help investors maximize their earnings and minimize their spending by taking a strategic approach to property management in Columbus. To learn more about how we can help you be successful with your investment, contact us today.