How to Maximize the Value of Single-Family Rental Properties
From Simple Fixes to Longer-Term Strategies, These Ideas Will Help You Make Sure You Are
Not Leaving Money on the Table
When you’re seeking to maximize the value of your single-family rental (SFR) investment, you’re strategically thinking about the property’s entire lifecycle. And ensuring a successful future for your SFR properties means having comprehensive investment property services in place now. Those services should span remodels, repairs, ongoing maintenance, tenant turns and everything in between. Do you have a strategic plan that helps you save money over the long term?
Andrew Nolan, President of Commercial & Residential Rental Services at MCS, a national property services company, offers his insights on the essential elements that can help you get there, whether you own 10 properties or a portfolio of 10,000 homes.
What is one thing investors often overlook that could help them maximize the value of their single-family rentals?
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 the 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’s critical because missing key maintenance checks can lead to expensive capital investment repairs and replacements later.
But 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.
From a cost-saving standpoint, what are some of the most important preventive maintenance items?
Number one is to perform regular air filter changes. Dirty, clogged filters can damage your HVAC system, leading to costly repairs or even replacement. Don’t rely on tenants for this task — studies show that only 18% of Americans change their air filters in their homes once a month as recommended, and nearly 30% don’t change them at all. Regular air filter changes can also help lower monthly electric bills by as much as 15%, because clogged filters significantly reduce a system’s efficiency.
Other key items are plumbing, roofs and gutters. Don’t wait for an emergency call from your tenants. Regular plumbing maintenance, like cleaning drains to prevent backups, can help avoid costly repairs and the fees associated with emergency calls. And don’t overlook exterior maintenance—avoid standing water, leaf and debris clogging, and other problems that could lead to expensive repairs by scheduling regular gutter and roof maintenance.
It can be easy to overlook exterior maintenance. What are some other ways to reduce those costs?
Watch your landscaping water usage. Keep water use (and related expenses) down by performing regular inspections of your sprinklers and/or irrigation systems. If needed, you may also want to consider monitoring water use via smart water systems that can provide remote monitoring and control Winterization of sprinkler systems and outdoor faucets is also essential. If you wait too long to winterize outdoor plumbing, you could end up with costly damage to the home’s water lines.
Preventive maintenance is one of the most time-consuming aspects of property management. Are there ways to be more efficient about it?
Definitely. 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-investment replacement and preventive maintenance schedules. We recommend at least biannual maintenance checks that include:
»HVAC systems (following ASHRAE standards)
»Roofing
»Water heaters
»Filter changes
»Plumbing
»Winterization of sprinkler systems and other yard maintenance (especially important for HOAs)
This is where a trustworthy property services partner can really make a difference when it comes to overseeing critical investment property maintenance and management tasks. 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.
What about when a property is unoccupied? How can owners use that time to their benefit?
Unoccupied rentals cost you money, so this is when you need to really focus on efficiency. Your properties need to be brought up to code, made livable for occupancy, maintained along the way and refreshed between tenants. But this is also a good time to make any updates that could increase your ROI—up the home’s curb appeal, swap out any dated fixtures and flooring, upgrade old appliances. These are things that can be tackled quickly and will help you get maximum value for your rental property.
Beyond the hard costs of maintenance, renovations and updates, are there other things that SFR owners can do to save money?
Something that property owners tend to ignore is the value of their own time. No matter the size of your portfolio, if you have to dedicate your time to calling vendors for every asset, it will be hard to find time to continue growing your portfolio and building your business. This is where a centralized SFR property services partner can make a big impact by keeping your assets in good quality condition, giving you a one-stop shop for everything from landscaping to plumbing and electrical repairs to utility activation/deactivation and eviction support services. This means shorter vacancies, greater local code compliance and potential financial savings realized from regular maintenance.
What should owners look for when vetting a property services provider?
Whether it’s occupied maintenance, tenant turns, inspections, seasonal maintenance, or renovation work, look for a single partner that can manage it all with an experienced team of service technicians, project managers and management.
Seek out a partner that has a boots-on-the-ground presence in key markets where they can self-perform, as well as one that has an expansive and proven network of service partners.
Local teams with subject matter experts will better understand the challenges you face, are connected in the market, and understand local regulations and code compliance. Plus, partners with a local presence can maintain oversight of third parties, if required, to ensure quality and accountability.
And always ask to see examples of a provider’s work, and seek to understand how quality checks are managed—a partner that emphasizes quality assurance is critical.
Lastly, be sure to inquire about a provider’s technology capabilities. Will you be able to submit and track work orders online? How will you know a job has been completed? Will the provider’s platform easily integrate into your own?
At MCS, our platform provides visibility into service requests as well as photo documentation of completed jobs, and it integrates into other platforms to make life easy for our clients who want to continue using their own systems.
Andrew Nolan is the President of the Commercial & Single-Family Rental (SFR) divisions at MCS, a leading property services provider for commercial properties, single-family rentals, and the property preservation industry. Andrew oversees the day-to-day operations and management for Commercial & SFR while driving the long-term vision and growth strategy for these two business lines. He focuses on leveraging technology to improve operations, translating data into creating desired customer experiences, and building high-performing teams focused on client satisfaction. Andrew has spent the last 10 years at both high growth public and private companies.
