First Rate Property Management Blog

PROACTIVELY REPLACING WATER HEATERS:

Julie Tollifson - Friday, April 24, 2020

PROACTIVELY REPLACING WATER HEATERS:


One of the unknown, inevitable, and scary parts of owning any property, not just an investment property, is unexpected expenses for repairs and replacements. Sometimes the expenses are small, but other times, they can be quite costly. 


Water heaters are an example of a costly expense for many owners. It is our job to help minimize the risk of these expenses. A brand-new water heater is expensive, but some find that replacing them before they go out is better than waiting until they go out. Unfortunately when a water heater goes out, it does not normally just stop making hot water, it starts leaking. Often times the water heater even continues to make hot water while leaking.   


To make matters worse, water heaters are usually found tucked away in a closet, garage, or even under a kitchen counter. While this may prevent a bit of an eye sore, it also can prevent residents from identifying the leak while it is minor. While putting in their lease and training our tenant during the move in walk through helps, tenants occasionally fail to notice and/or report leaks in a timely manner. As a result of the tenant-neglect or the fact that the water heater is out of sight out of mind, the leak can cause a great deal of damage that extends beyond the mere replacement of your water heater.  That is why some owners choose to proactively replace their water heaters. They would much rather sacrifice a few potential years of use with the existing water heater than pay the huge costs of cabinetry, drywall, or flooring. Another thing to keep in mind is that the potential flood/leak damage increases exponentially if the waters are on the second or third story.


Another cost to consider in this is lost rents. If your tenant doesn’t have access to hot water, this would constitute an uninhabitable property and would result in crediting prorated rent back to the tenants for the days in which it is considered uninhabitable.


Furthermore, many after-hours result in dispatching a vendor with “after hours billing” this is often much more inflated than normal business hour calls. It always seems like these water heaters never go out during regular business hours!


Most water heaters are sold with a 5-year warranty and are said to last about 10 years on average. 


But what if you have insurance? While having insurance is of the utmost importance to help mitigate your risk, most do not cover slow leaks. Most policies state they will only cover “sudden or immediate water losses”. 


So now you’re wondering, how can I minimize these seemingly inevitable costs? Here’s how:

  1. Make sure you know the limitations of your insurance policy, better to be proactive than reactive.
  2. Make sure you know where your water heater is located. First floor? Second floor? Garage? Is there a drain or pan underneath it? Is the pan plumbed to the outside of the building?
  3. Train your tenants on how to check for leaks and how often.
  4. Most of all, have a professional annually inspect and service your water heaters to ensure that they are functioning correctly. First Rate Property Management offers this service, among many others, annually in an effort to provide our clients with the opportunity to increase their profit margin by mitigating the risk of expensive repairs and replacements. 

Julie Tollifson, Leasing Team Leader

First Rate Property Management, Inc.
Boise, Idaho
Contact me for more information about this blog.

Investor Newsletter

Tony Drost - Thursday, February 14, 2019

Swope Investment Properties publishes a newsletter like this one This quarter’s newsletter discusses property inspections, maintenance tips, hazard insurance, supporting a local charity, and provides some listing information.  Please contact Shane Brown at brown.shane@me.com to be added to their electronic distribution list.

Swope Investment Properties is the leader in Boise investment properties, and surrounding areas.  Their agents specialize in residential income properties.  Established in 2003 by Mike Swope, the. brokerage provides a higher level of client services and satisfaction by using a consultant/advisor based approached, over getting the sale.  Swope agents understand that honesty and integrity are the keys to helping clients maximize their investment dollars, which often means advising clients not to buy certain properties to protect their financial interest. 

While most Boise real estate brokerages concentrate on residential housing, these agents are trained in the specific niche of investment properties.  The Swope team has broad-based market  knowledge in areas such as investing, cash flow, return on investment, analysis, property management, and tax implications.  All of their agents are real estate investors themselves, which provides them with invaluable experience, especially when it comes to investing in rentals.


It’s New, Why Inspect?

We always recommend an independent home inspection
regardless if its a home or multi-unit development that is being
purchased. What if it’s new construction? What if it’s a premier
builder? It’s not only my opinion, but its been my experience that
you absolutely should. With the shortage of multi-family housing,
some are rushing construction to completion and there is a lot being
missed. The punch lists can be significant.
A home inspection gives the Buyer detailed information about
the overall condition of the property prior to purchase. A property
inspection should provide an in-depth and unbiased evaluation of
the physical condition, structure, construction, and mechanical
systems, as well as identify items that need to be repaired or
replaced. Additionally, the inspector should be able to estimate the
remaining useful life of the major systems and equipment.
Inspectors will also check the attic and crawlspace to ensure there
aren’t problems that are not always apparent.
Make an independent home inspection part of your due
diligence, regardless of the property type or age. Our agents have
worked with a handful of professional home inspectors and are
happy to assist you.

By: Tony Drost

Feb. Maintenance Tips
1. Spiff up some paint - Freshen
up interior paint on walls, cabinets,
doors and trim. If you want to
hire a pro, call before spring and
you might get a discount.
2. Clean out dryer vents - Clean the
duct that connects the back of the
dryer to the outside vent. If you
don’t, lint and other debris could
decrease your dryers efficiency,
increase energy bills and even
cause fires.
3. Clean refrigerator coils- To keep
your refrigerator in tiptop shape
and save energy, clean the
refrigerator condenser coils
located in the back or on the
bottom of the appliance.
4. Give your mattress some love-
Vacuum box springs and the
mattress top and bottom. Rotate
or flip the mattress.
5. Clean windows- Clean up the
insides of the windows and let
some extra vitamin D in. While
you are cleaning you can ensure
the weather seals haven’t been
compromised and there is no
condensation forming. Also check
the caulking and weather stripping.


In Case of Emergency, Are you Covered?

Homeowner’s insurance provides a benefit to investing in real estate
that uninsurable assets don’t share. I truly valued the information
provided by Renae Goodwin of Payne West Insurance as a reminder
how to get the most from an insurance policy.
Goodwin addressed common mistakes made by real estate investors,
and shared these insights and others at a meeting of AVID Investor’s
Club:
• If your property is in an LLC, adding your LLC as an additionally
named insured is a commonly missed detail.
• Have your insurance agent run your property through the
replacement cost estimator every few years. If you haven’t
updated your coverage amounts or rent amounts, you may be
underinsured.
• Include personal property in a landlord policy – that covers the
range, fridge, window treatments and faucets. The dishwasher is
“built in” and already would be covered.
• Get a personal umbrella policy if you don’t already have one.
• Renae Goodwin of Payne West recommends using zip ties to add
red water shut off tags to the water shut off valves under sinks,
near toilets and for the main line of the house, so tenants may
help themselves in case of a late-night water leak.
• Understand what would fall under a separate endorsement a
separate policy. An extra catastrophe policy may be required to
cover floods, earthquakes or landslides.
• Ensure your lease or your property manager requires that tenants
carry renter’s insurance.
More information like this can by gained by taking advantage of your
invitation to an upcoming meeting of AVID Investor’s Club on
February 20th or March 20th.
AVID meets on the third Wednesday of every month except August
and December.
StacyA McBain

Swope Gives Back
Every year our office votes on a local
charity/non-profit to donate a portion
of our commission checks to. This
year we decided on Camp Rainbow
Gold and in January we dropped of a
check for $2,800! Thank you to
everyone who allowed us to represent
you and allow us to make a difference
in our local community!