Bonus Operations is a series hosted by apartment owner/operator and Best Ever Show host, Slocomb Reed. In each five- to ten-minute episode, Slocomb provides his top takes for executing your business plan and maintaining cash flow.
As a real estate investor or operator, you don’t get to decide when maintenance issues and emergencies rear their ugly heads. To protect your business plan, your property, and your tenant’s happiness, the best time to address maintenance issues is before they arise.
In this episode of Bonus Operations, Slocomb Reed shares tips and stories about why keeping up routine maintenance is essential to your success.
Click here to learn more about our sponsors:
Transcript
Slocomb Reed
Best ever listeners. Welcome to the best real estate investing advice ever show. I'm at Slocomb Reed. And today I'm bringing you another best ever operations episode. In these shows, I like to give you our best ever tips advice for the operation of your investments. I am primarily an apartment owner operator in the Cincinnati, Ohio metro area, for those of you who don't know.
It gets cold here in the winter. I'm recording in the end of November, 2023, and we're in the midst of a cold snap here. Cold snap means that we've got a solid 48 hours below freezing, uh, going from, yeah, Monday night into Wednesday morning.
So the advice that I have for you today feels particularly prescient in this moment, being that my metro area is experiencing below freezing temperatures for more than 24 hours for the first time this season. I wanna talk about the most affordable way to take care of your maintenance issues, that is to do them as routine preventative.
I'm going to get on my high horse here for a minute. Some of you know I have a professional property management company of my own. I started a heating and air company last year. So we serviced every single heating system in my portfolio, cleaned, checked, took care of whatever issues they had in the entire management portfolio back in September to make sure that when we got to moments like this, that our equipment was operating as optimally as possible.
But there are a lot of people, homeowners and real estate investors alike, who didn't do that. And now that we're finally experiencing the freezing temperatures that are testing their furnaces, their heat pumps, their boiler systems, they are scrambling to find the HVAC technician who hasn't been completely bombarded by all of the requests they're getting from everyone else who didn't do the preventative maintenance.
I want to tell you all a story. It feels like a horror story now from my life last year. But first, I do want to say that there's a lot of, especially for those of you, for those of us who are invested in markets in the United States that experience a lot of seasonal temperature change, a lot of seasonal weather patterns, places where it gets really hot in the summer, places where it gets really cold in the winter. Cincinnati gets not the worst of all worlds, but some of the bad weather of every market in the United States.
I highly recommend that you keep up with your major mechanical equipment preventatively whenever possible.
So here's a quick story from last year from my active owner operator and property manager perspective. That's going to make you passive investors absolutely love doing things the way that you do them and not the way that I do them. But it's a good lesson.
A good story for all of us to hear. The coldest temperatures that we got last winter in the greater Cincinnati area, it got down to negative 15 degrees the night of December 22nd, so technically very early morning December 23rd. It got cold enough that lots of pipes froze. Both water lines, not only just water lines though.
You know supply lines for your plumbing fixtures, but also radiator lines froze if they were exposed to the elements, but it stayed cold enough that none of those lines thawed until December 24th, Christmas Eve.
So my management portfolio went through the same routine last year that it did this year that we addressed preventatively did clean and checks on every piece of heating equipment in the portfolio in September and October. In my management portfolio, the issues that we experienced on Christmas Eve were at properties that we did not manage at that time, but also that they were issues that came up not because the mechanical systems weren't working, uh, but because of tenant error or, uh, poor or because water lines were on exterior walls, uninsulated in old buildings where they had been re renovated decades ago and the work had been poorly done.
That said, we were absolutely bombarded by inquiries from other property management companies, even at other homeowners who got to that point on Christmas Eve, where the heat had failed. They didn't feel comfortable in their homes or possibly had a pipe burst at home.
And we're scrambling to get those situations resolved because they hadn't done the preventative maintenance of taking care of their heating systems in the fall when it started to get chilly, but wasn't cold enough to really stress their heating systems.
I spent most of Christmas Eve last year, and I'll say my business is better structured now. I have other people and other systems in place to help me with this, but I spent most of Christmas Eve last year triaging heat loss and burst pipe issues from my computer at home, not getting on site anywhere because I knew if I went on site somewhere, that would mean I missed two calls for heat loss or burst pipes at other places and I wouldn't have been in a position to take care of them. I had my technicians scrambling all over town and I made it into the evening of Christmas Eve before I actually went on site someplace myself to get rid of one of those issues.
And I'm very grateful for the technicians, the contractors I have who were willing to work on Christmas Eve to make sure that people would have heat, would have water in their homes for Christmas Eve and for Christmas Day and into the new year. And of course the weather warmed up pretty soon after Christmas and gave us the opportunity to get in there and create permanent solutions to the temporary fixes that we had the time and capacity for on Christmas Eve.
But it was a very strong reminder that we don't get to decide when these kinds of problems arise. And the best time to address them is before they come up. It's to do your preventative maintenance, to have your air conditioning systems checked in the early spring, to have your heating systems checked in the early fall.
With your plumbing systems, do your backflow tests, have your sewer lines scoped every once in a while, just to make sure you're not gonna have a major blockage, especially if you're in a metro as old as Cincinnati or some of the East Coast or Northeastern metros in the US where you can have really old drain lines that easily get blockages or roots growing into old clay lines, things like that and make sure that you or your property manager has a schedule for routinely clearing gutters in the fall if you're in a place where the leaves come off of the trees.
I have to say I'm guilty of being too late on that at one of my properties here in Cincinnati this fall. The gutter got so full that, it's a new gutter, it's only been on that building for a couple of years, and it got so full that it started to separate from the building and water started coming into one of those separations into the living room through a window earlier this month actually, because that situation had not been addressed fast enough.
There are a lot of things that are mundane and routine, and they are expenses, they're things that you pay for before they're actually problematic, but in the long run, they save you significant money and headache and heartache for you and your tenants when it comes to preventing the kinds of things that are actually truly problematic, like loss of heat in the winter, especially when it's below freezing at night.
So please learn from my mistakes here. Do things like getting your gutters cleared out regularly during the fall, changing out your furnace filters, getting your heating and air conditioning equipment serviced before it's too late, taking care of your plumbing systems, checking for major issues before they arise.
And keep in mind that as buy and hold investors or rental property investors in general, this is part of what we're supposed to be doing with the revenue that we generate in the form of rents and fees is that we're supposed to be setting some of it aside to do these kinds of things to address major problems before they arise. I hope you best ever listeners have not had some of the problems that I've had this year and the last couple of years at my properties.
Best way to keep that from happening, preventative maintenance.
Best ever listeners, I hope you've gained value from this reminder to take care of the mechanical systems at your properties. I know it's a quick little episode for you, but it feels especially timely given the number of urgent and emergency calls that I'm receiving right now during this little cold snap here in the Cincinnati area for my HVAC company, to take care of your major mechanical systems preventatively.
Get on a routine maintenance schedule for heating, air conditioning, plumbing, for gutters and roofs and make sure that you are getting these things addressed. Spend the money even in this recessionary economic environment where we're not hitting pro forma NOIs the way that we had hoped one, two and three years ago. Take the time. Spend the money to keep up your major mechanical systems in a routine manner so that you're not spending all day on Christmas Eve handling emergencies.
If you did gain value from this episode, please do subscribe to our show. Leave us a five star review and share this episode with a friend who you know needs to hear this message today. Thank you and have a best ever day.
