on the level
Make a Resolution to Do a Maintenance Audit
By Terry Meany
The Golden Gate Bridge represents the best of San Francisco. After years of dreams and debate, and seven years after passing a $35 million bond issue, one of the most distinctive and recognizable bridges in the world opened for traffic. It had been said that “no one can bridge the Golden Gate because of the insurmountable difficulties,” but build they did in four-and-a-half years, which is less time than it takes to get potholes in the city repaired now. Bridge division employees, represented by 10 different unions and including 38 painters, keep the bridge viable and safe. Painting, as one can imagine, is an ongoing task and the primary maintenance work done on the Golden Gate Bridge. Although popular myth says it’s painted end to end every year, this isn’t actually the case. The bridge was painted once when it was built, and for close to 30 years it was touched up as needed. Major paint removal and a change of coatings began in 1965, but at this point, the bridge is simply touched up by painters who have one of the best views imaginable.
Your building isn’t the Golden Gate Bridge, but the same maintenance principle applies. The principle of deferred maintenance applies, too: let the small things go long enough and they can become much bigger and costlier problems.
Deferred maintenance is any postponement of repair and upkeep, both essential and non-essential, which leads to higher costs, mechanical or functional failures, or a reduction in property value. Sometimes deferred maintenance appears to be no big deal. It isn’t the end of the world if the windows don’t get washed semiannually, unless a tenant decides to try to wash the exterior side and has an accident or drops a bucket on someone’s head. Is it your fault? Do you really want to find out, along with incurred legal costs?
Maintenance budgets have to compete with mortgages, taxes and insurance payments. For small property owners, the “repair fund” often involves opening up the checkbook and frowning. It’s regularly a matter of figuring out how much it will cost now versus how much more it will cost later. Ignoring a small roof leak can lead to interior water damage, loss of rent (as well as paying for housing if a tenant has to move out for any period of time) and possible damage to possessions. Deferred maintenance affects you when you purchase a property. A building appears sound until you discover rot behind a wall that’s been painted to hide water stains, or wiring that’s been hacked and whacked so much it’s got more electrical tape wrapped around it than insulation.
Whether you have a new building or an existing property that’s seen better days, consider performing a maintenance audit to get a clearer idea of its condition. This audit will help you establish an action plan, which should include identifying the work that needs to be done and understanding the scale of the problems; prioritizing the work (critical, potentially critical and noncritical but need to be addressed); deciding how to pay for it (for example, using existing funds or borrowing); ascertaining which jobs you can do yourself or with in-house staff and which ones will require a contractor; timing the repairs to cause the least disruption possible; and performing the maintenance promptly to cut down on any backlog.
Your maintenance audit should go beyond noting the obvious. Consider it an assessment to include code-compliance issues, the age and condition of all working mechanical systems, and even the condition of the finishes and carpets. Knowing now that the floors in three units will need recovering in five years allows you to budget ahead of time and avoid balance-sheet surprises later. Recognize that you and your staff might not be the best personnel to evaluate some areas, such as the heating equipment or hot water heaters. Call in your furnace contractor, plumber or roofer as needed.
Your audit can alert you to impending problems or probable expectations. If you have two refrigerators of the same vintage and one conks out, you’re put on notice that the other one could be entering its personal global warming phase. Appliances, finishes, floor coverings and roofs all have lifespans that, although not set in stone, do have established averages based on regular use, which does not include, for example, expecting a home model dishwasher to hold up in a 24-hour hot-spot diner.
According to the “Study of Life Expectancy of Home Components,” published this year by the National Association of Home Builders, the average life of a refrigerator, electric clothes dryer, and an electric range is 13 years. A gas range and a kitchen faucet will go for 15 years each, while hardwood floors should go for a lifetime. There are problems with these figures. For one, there are several models of refrigerators—side by side, single door, freezer at the top—and each has a different life expectancy. Wood floors lasting a lifetime? What planet does this study live on? After three or possibly four sandings, depending on the thickness of the floor and the skill of the refinisher, that’s it; there isn’t enough wood left to grind them down again without affecting the stability of the floor. Some faucets never seem to die, while others, especially single-handled kitchen faucets, can be less than stout and hardy performers.
This study aside, tracking when one appliance fails gives you a baseline for replacing an identical appliance, so you’re less surprised when the time comes. Noting repeated failures of a particular model of garbage disposal tells you to switch manufacturers. Your audit might even alert you to the quality of a past contractor’s work, letting you know it’s time to find someone else. This isn’t unusual. Businesses change, as do personnel and manufacturing processes; a brand name or familiar local establishment isn’t enough reason to continue patronizing that business if it can no longer perform to an expected standard.
Keep in mind that deferred maintenance can create safety and liability problems, tenant dissatisfaction, and longer-term downtime later. Remember, too, that there will always be some deferred maintenance due to a lack of personnel, the unavailability of contractors or financial considerations. The key is to know what work can be put off and for what amount of time. An entry door that could stand refinishing, but still has some varnish left can wait until next year while a dying hot water tank cannot. Maintenance is as much about managing the workload as actually doing the repairs.
Property owners in the Bay Area have had the good fortune to be on the receiving end of an appreciation curve that will never, ever be seen in Cleveland, Detroit or Philadelphia. Increased values make up for some of the pains that come from being a landlord where one’s number of hats—property manager, plumber, banker, collection agent and attorney—is larger than most. Assigning an hourly rate to one’s time can bring a realistic idea of the rate of return from an investment property after the known costs are calculated. Depending on the market, you could discover your property’s appreciation is the only saving investment grace in continuing to own it.
That said, regular maintenance makes life easier for your tenants and that alone makes your life easier. It also maintains your property’s value, making it easier to sell in a hurry if circumstances compel a quick sale. In the long run, you’re actually likely to cut your costs down by addressing problems as they come up.
The opinions expressed in this article are those of the authors and do not necessarily reflect the viewpoint of SFAA or SF Apartment Magazine. Terry Meany is a former contractor and landlord. He is now a full-time writer and author of Working Windows: A Guide to the Repair and Restoration of Wood Windows, now in its second edition from Lyons Press. He is cost conscious but not cheap, and he knows deferred maintenance always costs more in the end. He can be reached at tfmeany@msn.com. Copyright © 2008 by SF Apartment Magazine. All rights reserved.