How Effective Preventative Maintenance Can Boost Your Bottom Line
Maintaining a building is the most important part of property oversight. Whether you are a building owner, manager, or an individual unit owner, you can never escape the ongoing cycle of maintenance. There is definitely temptation to cut costs and say “I’ll deal with it when it becomes a problem”, however, consistent, preventative maintenance can save the “problem” from occurring in the first place. Being proactive and having the right maintenance plan in place may not only extend the lifespan of a building but can also significantly outweigh the upfront expenses of projects.
How can I do this while still saving money?
- It’s the old cliché – spend money to make money, but it’s true! Implementing a strategic preventative maintenance plan can help save a substantial amount of money in the long run. Using a system of addressing minor issues before they escalate into major problems can help to avoid expensive repairs or even replacements. As an example, a regular boiler service and maintenance contract for a moderate to large sized building can cost $600-$800/month per boiler, plus any repair costs that may arise. However, if something is not maintained properly and causes a boiler to need to be replaced, the cost could be in the hundreds of thousands of dollars. Another potential benefit is the expediency in emergency responses and typically a lower cost for these types of visits.
But won’t I need to replace these systems anyway?
- Short answer is, yes, but the most important aspect is the WHEN . Every building has a multitude of systems and components working together to create a cohesively functioning building. Regular maintenance helps to ensure that these components, which may consist of mechanical, such as plumbing and electrical, along with physical items like roofing, and other structural elements, are kept in the best condition possible. So, while you may ultimately need to replace these over time, the life expectancy is significantly longer which can delay the costly replacement.
This all seems great, but how can spending more money grow my profits?
- What was one of the biggest factors for you when renting or purchasing a property? I am willing to bet that a large part of your decision was based on the condition of the property. If something was in a worse condition, perhaps your offer would have been lower, or maybe no offer at all would have been submitted. Keeping a property pristine makes it easy for tenants to rent and renew at higher prices due to overall happiness and potential buyers to pull the trigger. You may even find yourself in a bidding war if your property is that desirable!
Can I save money anywhere else?
- Yes! Having a preventative maintenance plan can also indirectly affect your margins by lowering other expenses in several ways, potentially even offsetting the cost of the maintenance plan itself. Provided are a few examples below.
Energy efficiency
When preventative maintenance becomes a daily part of a buildings upkeep, building systems will be running at peak efficiency and you will find that structures such as windows and doors will be better sealed resulting in a more insulated building. This will result in reduced energy consumption, ultimately lowering your utility bill.
Compliance with city and state regulations
If you are constantly inspecting and maintaining your building, this will include the implementation and adherence to any new state or city requirements for a property. Making sure you are in compliance will prevent any violations from being filed and save you money on any potential fines. If fined, you will have to pay to correct the violation anyway, so why not be proactive and save the fine?
Potential tenant concession savings
Should a building experience numerous and ongoing system failures, tenants might lose patience. If this occurs, you may find yourself offering compensation to tenants to prevent things like tenants moving out, or worse, a lawsuit. Compensation could be a one-time concession for the loss of use of a system or overall inconvenience or could be offered on a renewal as a lower rent, month free, or more.
There is a reason that the most successful properties remain consistent with their preventative maintenance programs. The reason is it works!
As you can see, the pros to spending the up-front cost, significantly outweigh any cons. Yes, it is a higher cost monthly, but the costs can be offset through other savings, and it can help to build the value of an asset. It is not just an expense, but an investment in the longevity, efficiency, and overall success of a building.
If you would like to learn more about how we can assist with maximizing your property, click on the below and one of our associates will contact you as soon as possible.
