Rental Portfolio Management Tips to Beat the Heat
The failure of an air conditioning system in a rental property in the middle of summer is a rite of passage for many investors. Whether your SFR portfolio is dozens of properties, or you own one rental home, an AC failure creates a crisis for a real estate investor.
Any investor who has been in the game for a while knows how it goes. The irate phone call. The repair guy who can’t get there fast enough. The second irate phone call from the tenant. The worry that other units might break. Sweat beads forming on your brow. Are those from your own AC fizzing out or just the stress? The repair guy calling saying a new system is needed. The tenant calling at the same time.
While more and more alternatives to traditional air conditioning for residential units are on the market, they are expensive and may not be the best option depending on how the numbers pencil out on your rental property. The reality is excellent customer service on your part will help cool off hot under the collar tenants in the downtime of air conditioning repair.
It is late summer, so you should have an HVAC repair vendor on standby. Part of building your team is having dependable vendors who will take your call and prioritize you because you give them a good volume of work and pay them quickly. If this vendor is a one-person company, you’ll want to have a good backup in place. Being able to get someone out for a service call quickly will keep your tenants losing their steam, and it may also protect your property from further damage.
Make sure to have a small stock of alternatives ready for our tenants. That can be a half dozen standing or window fans or portable air conditioners, a case of ice-cold water, or even a day pass to the local waterpark. Having some things that you can drop off ASAP to ensure comfort while you arrange a repair goes a long way when renters consider whether to renew their lease.
Your tenants will appreciate it if you give them a call afterward to see how repairs went. The reason this is important is this is a unique and frustrating experience for your tenant. It is much worse than a clogged pipe or a bug problem. The personal touch shows them that you care about providing them a great place to live.
The reality is that HVAC systems will fail after a number of years. Part of your rental property investment budget should include savings for capital expenditures that properties will eventually need—whether it’s air conditioning, a water heater, a new roof, or something else. Including CapEx as a budget item will lessen the sting of paying for a new HVAC unit when it’s necessary.
If your single-family investment is in a different area than where you live, or if you have a full-time job, a failed air conditioner is a reminder of the value of a great property manager. Having someone whose job it is to help tenants immediately takes the pressure off you as the investor, and it actually will help you provide better customer service. Plus, good property managers have vendors of all kinds on speed dial, and know who to call to get quality work at a reasonable price.
Bad things like air conditioner failures happen to properties, but they shouldn’t be crisis moments. Having a plan will keep your tenants happy and your property in good repair.