The 3 Most Common Mistakes For Maintaining Your Rental Property

Mistake #1: Improving the wrong things

I have spent time and money making improvements that in the end did not add enough value to make it worthwhile. In retrospect, I had to learn how my residents would live in my rental houses before I knew what improvements made the most sense. Take the dining room for instance. Soon after going back inside several of my rental houses after they were occupied, it occurred to me that the residents in my market did not use the dining as it was originally intended. More often than not, it was being utilized as an office, kids play room or even another bedroom. This being the case, it was obvious that spending money on dining room chandeliers was a complete waste of resources. This is just one example of making sure the money spent on improving the property is of value to the residence.

Mistake #2: Making improvements at the wrong time

I am always juggling market strength, lease termination times, maintenance crew cost, and time available for making improvements. All of my properties could have improvements and maintenance the next time they are vacant, but what determines my actions depends to some extent upon the strength of demand for my units and other market factors such as competition. Improvements have the potential of being adjusted a bit depending on the length of time my crew has between residents. All of the safety and important maintenance items are done right away while they are occupied, if possible. I have houses that have had a short list of "want to do's" for quite some time, but it's hard to justify doing these when I can have the house rented again right away without doing them. As you can see, the decisions of what to do and when are flexible. On the other hand, once I bite the bullet and decide to make improvements, the economic benefits may or may not manifest in a timely manner.

Mistake #3: Ignoring drainage issues

I pay extra attention to where the water drains on and around my properties. Storm water drainage is a huge issue due to the amount of damage water can do to a house in a short amount of time. My area gets a lot of rain, so I am used to paying close attention to this. I have a list of houses that have had problems in the past or that I see have the potential to have problems when there are heavy storms. These houses get checked on after every major rain event with special attention paid to sensitive areas of concern. Simple things like a pile of leaves or other litter that diverts drainage water towards the house, disconnected rain gutter downspouts that playful kids have fooled with or a piece of plastic that clogs the driveway drain can cause water to get into the house. The few houses that I have with basements all have sump pumps that are checked on regularly. Because of this, I always have water damage on my mind whenever it rains.

Mike Sanderson is the author of the new book "Flipped Out? - Want to Achieve Sustainable Real Estate Success?" Available now at http://www.SandersonInc.com He is the CEO of a family business that owns, manages and maintains over 100 revenue producing rental units--a majority being single-family residences that were purchased in disrepair. Mike has actively participated at all levels of the purchase, construction and remodeling of over 100 homes and 20+ multiple unit buildings. He has numerous years in the construction of roads, new homes and remodeling that give him the distinct advantage of having a vast amount experience.