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Maintenance emergencies should always be expected when owning a property. This is especially true for real estate investors. Our guest today is Dan Hines, Regional Director with Mynd Property Management, who will be discussing what sorts of things can be expected to go wrong when owning a rental property and how best to deal with such emergencies.
Steve Rozenberg: Hey, everyone. I am Steve Rozenberg with Mynd Property Management and I’m joined here today with Dan Hines, Regional Director of Sacramento Property Management. Dan, thanks for joining me. I appreciate it.
Dan Hines: Yeah, thanks for having me on.
Steve Rozenberg: What I’d like to talk about today is what are some things that will normally break in my rental home in Sacramento? What can I expect to go wrong, basically?
Dan Hines: It’s not Sacramento specific, but I would say at some point anything and everything can or will break.
Steve Rozenberg: Yeah. Murphy’s Law, right? Yeah, exactly.
Dan Hines: You should know this more than most people. Right?
Steve Rozenberg: I do. I do. And my experience has been if it has an on/off switch or something that you open or close… If you’re moving it and it’s got moving parts to it, the odds of it breaking are pretty high, like an air conditioning unit, a hot water heater. Obviously, some things may break more. Down in Houston, Texas, air conditioning’s run 10 months a year, 24 hours a day. Those probably will break quicker than a heater would because they’re not used as much.
So in Sacramento, what are… And I don’t know if there are more common things or not. But what would you say are just some common things if I’m an investor that I need to maybe think about or put aside in contingency money to say, “You know what, this probably may break.” And what are some things that maybe I should look at that will give me indications that possibly it may break sooner than later?
Dan Hines: Yeah. HVAC is a big one. Our winters here in Sacramento, they do get chilly. Heaters are run pretty frequently. And in summer times, it’s dry heat compared to Houston, but it gets hot.
So I would say eight months out of the year there’s some sort of a system, some sort of a fan is blowing. Stay up on your preventative maintenance. Don’t assume that the filters are being changed. Set the expectation with your resident. If filters were supposed to be changed every 30 days or 90 days and assess them, at least make sure that they know that. Right? Water heaters can be a big one depending on the age of it. Those can almost become predictable on when they’ll start to go. And part of the problem is that all of these things can be expensive. But to your point around Murphy’s Law, oftentimes when they break it’s at very inopportune times. So-
Steve Rozenberg: Yeah. Friday night on 4th of July weekend is when mine normally would break.
Dan Hines: Exactly. So anything that you can do to stay in front of that stuff. Have reasonable expectations. If it’s a 20 year old unit, expect that you’re going to have some expenses. Expect that things are going to be wrong. just plan for that stuff.
Steve Rozenberg: Yeah. And some things also that a lot of people don’t think about, and I’m curious of your opinion, is just little things like the flapper valve in the toilet which causes the toilets to run, which is a high water bill. And all of a sudden the tenant’s like, “My water bill is through the roof.” And it’s because the seals of the flapper valves or the guts of the toilet are just old and not replaced. Do you find that as well? Or anything like those?
California… At least in Texas I’ll say the soil that all of Texas sits on shifts. So you get foundation issues, which means doors don’t close all the time correctly. I know you get earthquakes obviously. In Sacramento, not as common, but that probably would not affect it as much. But anything like root lines? Or any problems with that? Or is that pretty standard as far as…
Dan Hines: Yeah. You bring up a couple of interesting points. If you have some large trees around the property, definitely pay attention to their root lines. I’ve seen issues where if a plumber checks out… The local line’s just inside the house, everything’s fine. But as soon as you were to camera out to the driveway, it’s root city and that’s all bad.
So one thing that stands out that a lot of people don’t prioritize or forget about, clearing out the gutters. If you have trees that hang over at all, and Sacramento has a lot of trees, as soon as those gutters get full it kicks off a series of other types of issues. And I’ve seen some really expensive repair issues all come from the fact that gutters got too full. Water wasn’t diverted the right way, it puddled up somewhere else. And had you spent the couple hundred dollars to clear them out you would’ve avoided a whole lot of issue and a whole lot of pain?
Steve Rozenberg: Yeah. That’s true. I know in Texas you get foundation issues because all of a sudden one side’s getting water, the other side’s not. And next thing you know it’s a disbursement. So, yeah. That’s good. That’s good. Okay. So those are good information. And obviously air conditioning is a big one. Trees, roots. Again, anything that has an on/off switch. And just like you said, I’ll reiterate that it depends on the age of the unit. If something is 20 years old, you probably need to put some money away in a contingency and know that the odds of it breaking are pretty high. Or if you lived in the house and you always had to jiggle the handle on something and then a tenant moves in and then they break it and you’re like, “Why didn’t they just jiggle the handle like I did for the last 20 years?” That doesn’t work because you’re running a business and it’s not the way that you would do it. And they always say, “Well, it always worked for me.” That’s always what I used to hear is, “It worked when I lived there.” It’s like, “Well, you’re not living there anymore and they don’t know the hop, skip, and a jump of how to turn something on.”
So again, my advice is when you turn over a property to a resident, always make sure that you’re giving them functional items that work, not things that they have to figure out and do these tricks on to make work, because that’s where challenges happen. And I think that’s a great point.
Dan Hines: Yeah. I mean, one of them is that’s what a good responsible landlord should be. But then farther downstream, there’s another element where if you’re not maintaining the proper systems you can find yourself dealing with real habitability issues. And you don’t want to end up there.
Steve Rozenberg: There’s laws. There’s property code laws. And all of a sudden now you may have to put them up in a hotel. You know what I mean? There’s a whole bunch of things that could go down south on that way. So, yeah. That’s a very good point. And again, you don’t want to get into… It’s better to be proactive and fix it on the front end just like you said, right in the beginning, preventive maintenance, than being reactive and now it’s Friday night on 4th of July weekend and you’re paying top dollar to get an A/C guy out there because it’s 300 degrees in the house and the tenants are having trouble. And so, yeah. I agree. Being proactive on the front end will solve a lot of these problems. And that’s great information. Dan. If they-
Dan Hines: -a better resident experience.
Steve Rozenberg: Absolutely.
Dan Hines: It keeps you in control, yeah.
Steve Rozenberg: Yeah. And again, then the tenants will stay longer and you’ll get your cash flow and the business will operate like a business. So there you go. So Dan, if they want to get ahold of you in Sacramento and they want to know more about Mynd and maybe what you do, how do they do that?
Dan Hines: Yeah, go to our website. It’s Mynd.co. So it’s M-Y-N-D.C-O. We have a ton of information there from property owners on what we do, how we do it, how to contact us. And you can get information on all of our markets there as well.
Steve Rozenberg: Great, great. And if you want to join our Facebook group, we are on social media. You can go to our Mynd page, M-Y-N-D. and we also have a real estate investment club. It’s called the Mastermynd, M-Y-N-D, real estate investment club. And it’s for investors that are new, experienced, wanting to be an investor. Anyone can join. And again, you’re going to exchange ideas, conversations with real investors that are out there in the heat of battle with these very same conversations. So please make sure you join. And this is Dan and Steve with Mynd Property Management. We’ll talk to you guys later. Bye-bye.
Owning a property comes with its own complications and potential emergencies. This is especially true when renting a property. Owners and managers should expect something to break or go wrong at some point. Planning ahead for such emergencies and keeping up with preventative maintenance can stave off any potentially major issues. Understanding that a rental property is an investment and a business can help investors and managers better position themselves to deal with potential emergencies before they become worse.