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Asset Management

A/C Maintenance 101

Maximize Your SFR Investment and Renter Satisfaction By Doug Ellis A/C maintenance is key to lowering energy bills and preventing expensive repairs. These items should be addressed as part of an A/C preventive maintenance visit. Summers can be tough on your air conditioning system. If you missed an early season A/C maintenance check on your single-family rental (SFR) properties, do not put it off any longer as fall and winter can be an excellent time to catch-up on maintenance projects. Waiting longer or skipping regular maintenance can potentially cost you expensive repairs and even the premature replacement of your A/C units. And preventive maintenance for A/C systems is essential to ensure their optimal performance, energy efficiency, and longevity. Regular maintenance can also help prevent costly (and emergency) repairs and improve indoor air quality. According to Modernize, the average HVAC replacement cost ranges from $6,465 to $11,877 and can cost much more for emergency services. In fact, HomeGuide reported HVAC emergency services typically cost double or triple the regular rate for a service call. A/C Preventive Maintenance Frequency If HVAC systems are well maintained, you can expect an estimated life expectancy of 15 to 20 years in most parts of the country; in hotter climates, it is closer to 12 to 15 years. According to the Indoor Air Quality Association, regular HVAC maintenance reduces the risk of costly breakdowns by as much as 95%. How often should you be scheduling HVAC preventive maintenance for your rentals? An optimal maintenance program includes:  »         Two major checkups //typically in the spring and fall—where all systems (including refrigerant levels) are checked, coils are washed and filters are changed.  »         Two minor checkups //typically in the summer and winter—where a visual inspection of the system is conducted and filters are changed. Start by getting your A/C units checked, and then get them on a regular preventative maintenance schedule. Here is what an HVAC technician should be checking and addressing as part of an A/C preventive maintenance checklist: Air filters Regularly replacing air filters (as part of your planned A/C maintenance and then monthly) can potentially help you avoid problems with your HVAC unit. Plus, by routinely changing air filters, your renters can save on their energy bills. In fact, the U.S. Department of Energy estimates that replacing those dirty filters can result in a 5% to 15% reduction in energy consumption. While they stand to benefit, it is generally best to not rely on your renters to tackle this task, though. Talk to your property services partner about scheduling this routine job. Refrigerant system The refrigerant system is a critical component of A/C maintenance, moving the heat from indoor air to outside. Too much (or not enough) refrigerant decreases a system’s efficiency, drives up costs and can shorten its life. Inspecting and charging refrigerant levels are important for keeping A/C systems in working order. Refrigerant leaks can harm the environment as well, so it is important to address any issues promptly. Outdoor condenser coil Because the outdoor coils are naturally exposed to dirt, pollen and other potentially damaging elements due to their outdoor location, they need to be cleaned at least once a year. An HVAC technician will check and record the refrigerant pressure, then rinse the coils with water, applying a cleaning agent and removing any debris that has accumulated around them. Foliage check While they work great aesthetically as a disguise, shrubs and plants around outdoor A/C units should stay trimmed back—at least 18 inches on all sides of the unit—to permit air flow. Your property services partner should report back to you if landscaping near the unit is a concern. Indoor evaporator coil Indoor coils should be cleaned and inspected for damage every year, especially in advance of the summer months when air conditioners will be doing the most work. Condensing system When an air conditioning system pulls heat and moisture from the air, that condensate must be drained outside. The condensing system should be flushed during an A/C maintenance check to prevent or remove any clogs and allow for proper drainage. Electrical components During this A/C maintenance visit, the tech will confirm that all electrical components are firmly connected and tighten them if needed. In addition, they should test all motors, contactors and capacitors and recommend replacing any that are underperforming. This step can help you avoid bigger and more expensive repairs. Ductwork The A/C maintenance visit should also include a test for air leaks, paying close attention to any gaps or loose ductwork and sealing them as leaks or blockages can reduce efficiency and cause uneven cooling. Cleaning the ducts can also keep pollutants like dust and mold from being circulated inside the home, a benefit your renters will appreciate. Additional items During regular inspections, other items that should be addressed include inspecting and tightening electrical components, lubricating moving parts, checking insulation, testing capacitors and relays, and inspecting thermostats and controls. Remember, while you can perform some tasks yourself, it is crucial to have a professional HVAC technician perform a thorough inspection and maintenance annually to keep your A/C system in optimal condition. Plan your A/C maintenance check today Keeping up with routine A/C maintenance can help you maximize your SFR investment by potentially avoiding expensive repairs and even the premature replacement of your unit. Plus, your renters may be able to enjoy the benefits of lower energy bills and improved indoor air quality, contributing to overall renter satisfaction. Property service companies like MCS can help SFR owners and operators build and manage an effective A/C maintenance program.

Fix and Flip

Smart Upgrades

Leverage Renovations to Maximize Your SFR Investment Value By Doug Ellis Renovations can enhance a home’s value, but owners and operators of single-family rentals (SFRs) have special considerations. If you are thinking about a renovation, it is important to determine your goals for the project. For example, are you hoping to increase your monthly rent, attract quality tenants, reduce turnover or decrease long-term maintenance costs? Because beyond their inherent costs, rental renovations require properties to be vacant, which cuts into your return. So, when does a renovation make sense for your SFR and what do you need to know about renovations? Here are a few key observations from MCS’s team of reno experts to consider as you decide if renovating a rental property makes sense for you. When Renovating a Rental Property Makes Sense Because renovations can be costly and may not provide an immediate return on investment, SFR renovations may not always be a priority. There are two key times when renovating can make sense: At acquisition The best time for rental renovations is typically when the property is first purchased. Newly acquired SFR properties may need updating to attract quality tenants or to achieve target rents, so renovating properties as needed when you add them to your portfolio may make the most financial sense. At the end of a holding cycle Depending on whether you are on a five- or 10-year holding cycle, hitting this milestone could be the right time for rental renovation. If a property is still in good condition at the end of your first cycle and you want to hold on to it, this can be a good time for renovating a rental property. In this case, your renovation could include making updates that are in line with market demands as well as replacing bigger-ticket items that were not included in the initial renovation. What about during tenant turns? This might seem like an optimum time for a large renovation. But when a tenant moves out, repairing damage, patching holes and updating only the essentials is more likely to get you the most bang for your investment buck because it enables you to get the next paying renter into the property as quickly as possible. That said, tenant turns can be a prime opportunity to review major appliances for age and/or issues and to replace and standardize products across your portfolio. Upgrades That Can Lower Your Maintenance Costs The focus of rental renovation is often on cosmetic elements, but replacing larger mechanical items can help reduce the costs to maintain your property. For example, if your air conditioning, refrigerator or water heater are within a few years of their life expectancy at acquisition, it can be a good time to proactively replace them.  This tends to be the case for sump pumps in newly acquired properties as well, because you often will not know how long one has been there or how it has been maintained. Replacing aluminum wiring in older homes with copper (to reduce fire hazards) is another common upgrade. There are also smaller fixes to consider, from replacing wax rings on toilets to smoke detectors and/or their batteries to switching to energy-efficient light bulbs throughout the property. To help ensure you maximize energy efficiency and your investment, consider starting with an energy audit to see where you stand. Rental Renovation Essentials: Scope Levels and Value-Adds When you do decide to renovate your SFR, keep in mind two things: the scope level for your property and the value-adds that an SFR property services partner can provide. Renovation scope levels Most of the time, you as the owner/operator will determine the scope of the renovation, providing your services partner with basic guidelines (a knowledgeable renovation partner can help with scoping or make recommendations if you need it). Your scope should include room-by-room aesthetic and mechanical checks (with photos included) for potentially required upgrades, such as flooring, lighting, paint, plumbing, electricity and HVAC. Be as detailed as possible to ensure all your requirements are addressed in the pricing and bidding process. Any safety hazards should also be identified and remedied. Value-Adds from Your Partner An experienced SFR property services partner like MCS can help you get the most value from your investment while staying within your budget. For example, your partner can assist with things like:  »         Value engineering // Our team of experts is trained in value engineering your renovation project. By thoroughly evaluating your properties to consider the cost/value ratio for various potential renovation options, MCS works to provide the best performance and appearance for the least amount of investment.  »         Data collection // Having a database that catalogs the fixed assets within each home you own, with details like each item’s age and service date records, is essential not just for renovations but for general property maintenance. Without this information and the related checks, you are more likely to end up with expensive capital investment repairs and replacements later. By tracking appliances and major systems within your properties for you, our team can alert you regarding potential issues that could impact your investment.  »         Ongoing maintenance // Having a trusted SFR partner like MCS manage your maintenance needs means multiple small and large maintenance considerations (and managing their timing) are off your list, from smart home installations to changing out batteries in smoke detectors or carbon monoxide units to replacing HVAC filters. We can also help you build a proactive preventive maintenance plan so these checks do not get missed.             Having a plan in place can reduce or prevent potential repairs, extend the lifespan of your mechanicals, and provide data you can use to make decisions regarding capital-investment replacement and preventive maintenance schedules.  »         Occupancy checks // During a tenant turn or an acquisition renovation, as your provider, we can help secure your property via regular occupancy checks to ensure no one has illegally moved into the vacant home until it is tenant-ready again. Depending on the state of

Property Preservation

An Ounce of Prevention — Best Practices

Preventive Maintenance Plans Can Save You Time, Money and Hassle By Doug Ellis As they build their portfolio of single-family rental (SFR) properties, owners and operators focus on key business strategies—to find quality renters, reduce tenant turn times and maximize their investment. But there is one step a lot of owners and operators often overlook: preventive maintenance. Part of maximizing your SFR investment is ensuring that each of your properties is properly maintained. You do not want to waste your time or money, so be strategic and thoughtful in your approach. This means knowing what you have in each of your homes and investing in a preventive maintenance plan. Here is what you need to know about getting started with SFR preventive maintenance plans. Start with an Asset Database Many SFR investors are lacking a simple tool to help them manage their properties effectively—a database that catalogs the fixed assets within each home they own. For example, how old is your HVAC unit? When was the water heater last serviced? Have there been roof repairs? An asset database is key to staying on top of property maintenance, and that is critical because missing key maintenance checks can lead to expensive capital investment repairs and replacements later. Having a detailed record of your assets, as well as which services have been performed and when, can help you properly maintain the properties. This work ultimately helps prevent unnecessary costs and headaches. Plus, this data can enable predictive analytics so you can perform preventive, versus reactive, maintenance. Build Preventive Maintenance Plans With your asset database in place, you are able to build proactive preventive maintenance plans. Having an established maintenance plan in place can help reduce or prevent potential repairs and extend the lifespan of everything from HVAC units to plumbing fixtures. Plus, you can use the information to make decisions regarding capital investments. So, what items should be included in your plan? To help extend the life of the assets within your SFR properties and capitalize on your investments, MCS’s investment property management experts recommend at least biannual maintenance checks that include: HVAC systems HVAC preventive maintenance helps you protect your SFR investments by avoiding extensive repair costs, early unit replacements and lost revenue from disruptive tenant relocations in the case of an outage. Schedule checks that follow ASHRAE standards for HVAC preventive maintenance with your SFR property services partner twice a year to keep your system in working order. Each year MCS receives a large number of work orders due to backed-up condensate lines, an issue that can result in drywall damage, mold and remediation. With a proper preventive maintenance plan, HVAC condensate lines are “blown out” to help prevent back-up, keep the system operating efficiently and reduce larger repair expenses down the road. Filter Changes Beyond biannual checks for your overall HVAC system, regular filter changes should get their own checkmark on your preventive maintenance checklist. Replacing HVAC air filters is essential to extending the life of your units. But even though your tenants would experience cleaner air and near-term savings—the U.S. Department of Energy notes that replacing a dirty filter can reduce an A/C’s energy usage by 5% to 15% — it is a task you should not hand over to them. Instead, schedule regular filter changes with your SFR property services partner. Roofing Roofs and gutters may be the most frequently neglected maintenance item—until there is a problem. Avoid big repairs or emergencies through regular inspections and cleaning. Ensure your property services providers check for potentially loose or damaged shingles or tiles and clear gutters regularly to avoid standing water and reduce fire hazards.  Water Heaters Extensively used assets like water heaters require checks to keep them working well—and longer. Because sediment can build and pollute the water in your water heaters, scheduling preventive maintenance checks every year to flush them can help keep them running as efficiently as possible. Plumbing Preventive plumbing maintenance can catch small issues before they turn into bigger ones. Have your property services provider regularly check all plumbing fixtures to ensure they are in working order and are sufficiently tightened or fastened. Drain cleans to avoid backups should also be on your checklist. Landscaping Do not neglect your SFR properties’ exteriors. From ongoing yard upkeep and fence repair to the winterization of sprinkler systems, addressing issues before they become problems via preventive maintenance maximizes your investment in multiple ways, including avoiding costly fines for HOA and other municipal violations. Find a Partner to Help Having a property services partner to oversee critical investment property maintenance and management tasks can help you keep your properties in peak condition. A good partner can help you build and maintain your fixed asset database, keep preventive maintenance schedules and serve as a maintenance expert for your entire SFR portfolio. Beyond handling these critical needs, your property services partner also can help you understand and consider the bigger picture of your entire portfolio, so you can confidently decide when and where to make capital investments strategically. We see a lot of owners forgo preventive maintenance, but that choice consistently backfires. You would not expect your car to keep running well—or for long—without regular oil changes and other maintenance. The same is true for your homes.

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