Essentials of Seasonal Maintenance
Enhancing Property Value Through Maintenance and Winterization
By Aimee Lindsay
As a real estate investor or property owner, it’s critical not to underestimate the importance of property maintenance in minimizing your investment costs and maximizing the long-term value of your assets. Regular maintenance is necessary to make the most of your investment, whether your goal is to sell quickly or earn the most income for your rental. A proactive approach may help you avoid costly damage that could harm your profit potential. It is especially crucial as we head into the fall and winter, as minor damage can quickly escalate into a serious issue when weather conditions harshen.
The current market dynamics have made it more important than ever for investors to elevate their standards for property maintenance. High home prices and mortgage rates have slowed the purchase market down significantly. The single-family rental (SFR)market has also cooled, with rental growth slowing progressively over the last year, according to CoreLogic’s Single-Family Rent Index. In the meantime, owners are competing to have the best property in the neighborhood in terms of value and also appearance. How a property presents itself tells buyers and tenants a great deal about the amount of care the owner has put into the property.
Importantly, the appearance of a home can make a significant difference in its sale price and rental potential. Homes that are well-maintained, aesthetically pleasing, and show an attention to detail generally have a higher perceived value. On the other hand, homes that appear shabby, neglected, or in need of repairs may have a lower perceived value and could potentially sell or rent for less.
According to a joint study by the University of Alabama and the University of Texas published in the Journal of Real Estate Finance and Economics, attractive, well-maintained homes tend to sell for an average of 7% more than similar houses with an uninviting exterior. That premium rises as high as 14% in slower real estate markets with greater housing inventory.
Several factors contribute to the impact of a home’s appearance on its price:
» First Impressions // The exterior of a home is the first thing potential buyers see. A well-maintained exterior, including a manicured lawn, clean façade, and attractive landscaping, can create a positive first impression and increase the perceived value of the property.
» Interior Condition // The interior of a home also plays a crucial role. Homes that are clean, organized, and well-maintained can leave a positive impression on potential buyers. Up-to-date fixtures, fresh paint, and modern finishes can enhance the perceived value.
» Perceived Maintenance Costs // Buyers often consider the potential maintenance costs when evaluating a home. A home that appears to be in good condition is likely to be perceived as requiring fewer immediate repairs, which can positively influence its value.
» Comparative Market Analysis (CMA) // Real estate agents and appraisers use comparative market analysis tools to estimate a home’s value based on recent sales of similar properties. If homes in the same neighborhood with similar features and square footage have sold for higher prices due to their better appearance, this can impact the perceived value of your property as well.
What You Should Do
Whether your property is vacant or occupied, there are several steps to take before colder weather arrives to keep your asset ready to sell or rent for top dollar, or to keep your current tenants safe and satisfied.
Exterior Fall Spruce-Up
While the changing leaves can make autumn a beautiful time of year, those leaves also create a mess for property owners. Leaf debris can clog gutters, smother lawns, and allow fungus to fester. If left untouched, a gutter full of wet debris can freeze in winter and create an ice dam that may damage the roof deck. Tree limbs and shrubs that have grown close to the house over the summer also pose a risk, as they can cause damage when weighed down with snow and ice in the winter. That’s why it’s important to perform a fall spruce-up to keep the exterior of the property tidy:
» Pick up all debris in the yard prior to mowing. Cut the lawn at 2 inches; grass clippings, leaves, limbs and debris must be removed from the property.
» Leaves, pine needles and twigs should be removed and disposed of offsite in an appropriate manner.
» Flowerbeds, driveways and sidewalks should be edged.
» Remove all weeds and saplings from flowerbeds and around shrubs and fence lines.
» Weed whack around house, fences, trees, and remove dead vines from fence, latticework, etc.
» Remove all fallen limbs and excessive leaves from the roof.
» Clean out gutters and remove all holiday lights. If there is a gutter guard, replace it after cleaning out gutters.
» Prune branches from trees and shrubs that encroach on entryways, walkways, or sidewalks and trim at least four to six inches from the house or roof.
Winter Maintenance
Fresh snow and ice may appear to be a beautiful winter wonderland, but they can be a hazard for properties that have not been properly maintained. Winter weather conditions can create a high risk of damage to your roof, interior, and plumbing. Freezing temperatures outside and dry heated air inside can create a variety of issues from leaky roofs to frozen pipes. A small problem can suddenly become much bigger with heavy rain or a snowstorm. The following maintenance tasks should be completed before cold weather sets in:
» Perform routine service on HVAC system and replace filter.
» Flush out water heater to remove mineral deposits.
» Caulk gaps around windows and add weather-stripping around door frames to create a seal against the cold air.
» Clean out chimneys (if applicable) and fit with a cap to keep out animals.
» Detach garden hoses and close the water valve to outdoor hose taps. Drain water from all exterior lines.
» Evaluate insulation and ventilation in attic to insure proper circulation.
» Inspect exterior walls, stairs, and walkways for wear and tear. Inspect for openings that critters could use to enter the property.
» Stock up on salt to prepare for winter snow. During winter, be sure to shovel snow promptly to prevent ice from forming and remove any icicles around doorways.
Winterization for Unoccupied Properties
Unoccupied properties require additional winterization efforts from early October until at least the end of March, depending on the local weather and temperatures. Vacant properties are more prone to damage, theft, and pest infestation. Whether the asset is an REO property for sale or a short-term rental that is seasonally vacant, extra care should be taken to ensure it is well protected from these risks. In addition to all of the fall and winter maintenance tasks outlined above, here are a few things to consider when winterizing a property:
» Electrical and heating services should be up and running and must remain on. The temperature within the home should be set to 55 degrees during the winter months. If utilities are off, conduct an air pressure test to determine the state of the system.
» If the property requires significant plumbing repairs or when a boiler is involved, a general contractor, licensed plumber or an accredited entity with the professional expertise should complete the winterization.
» If you have added a property to your inventory that is still winterized from last season, the property should be de-winterized to ensure that the mechanicals are all in working order and then given a fresh winterization.
» If the property is frozen when it comes into inventory, obtain bids to thaw the pipes prior to winterizing.
For properties that are located in a Redemption/Confirmation/Ratification state there may be some additional considerations. If such a property is deemed vacant or abandoned and is not listed for sale upon the initial occupancy inspection, be sure to do the following:
» Rekey the backdoor of the property. Do not install a lockbox at the property.
» Complete the winterization of the property and record the work done on a Winterization Checklist.
» If the property was previously winterized by the servicer, de-winterize and re-winterize the property according to client standards.
» Take detailed time-stamped photos prior to and after the work was completed.
For most property owners, including SFR owners, routine maintenance is the best way to preserve value. Consider scheduling more frequent and proactive supervision such as weekly checks to make sure each property is secure, and that any debris is removed, and any needed repairs are made promptly.
Supply Chain and Labor Issues
Those who plan ahead will have the best chance of avoiding delays due to supply chain disruptions and labor shortages. Unfortunately, these pandemic era issues persist to this day. As a result, the cost of maintaining a property is increasing. Nationally, the average annual maintenance cost of single-family homes during the first quarter of 2023 was $6,409, up about 9% year over year. Townhouse costs rose about 4% and condo costs rose less than 2%.
On the labor front, the lack of home service labor is most evident in the Rust Belt states according to the Bureau of Labor Statistics (BLS) and Census Bureau. Metro areas in West Virginia, Pennsylvania, Illinois, and Ohio all rank in the 10 places where labor shortages may most impact homeowners.
This makes it more important than ever to find and work with reliable vendors that have access to a network of professionals, can ensure repairs are done quickly and to high standards, and provide you the most value for your maintenance budget.
Regardless of its status — vacant, occupied, listed — the appearance of a property can have an impact on its perceived and realized value. A good-looking property can also influence the standard for the surrounding neighborhood which can, in turn, preserve and increase the value of the property in a positive feedback loop. Moreover, the pause in the housing market’s sharply upward trajectory is an excellent time to inventory properties, ensure they are well-maintained, and schedule repairs and winterization as needed. For larger projects, timing is particularly important because of a scarcity of key construction materials and a shortage of skilled labor with limited availability on tight schedules could delay the job.
Despite a slowing market, the continued demand for high quality rental housing and scarce supply of new properties has created favorable conditions for those with inventories of well-kept assets. But extreme winter weather can take a toll on profits for those who are unprepared. As fall quickly approaches it is wise to protect those properties from the stormy days ahead and safeguard your investment.
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