You have a responsibility owning property: number one to yourself, to make sure that the asset is performing as well as possible; and number two, you need to make sure that the asset that you have is a good living environment for the tenant. Here’s a good example about these responsibilities through the Smart Property Investment portfolio.
There’s this one property in the Smart Property Investment portfolio up in Berkeley Vale in NSW, not too far from Tuggerah, 50 minutes away from The Entrance. We transformed it from a two-bedroom house with a breakout area downstairs into a three-bedroom house upstairs and a studio apartment downstairs, and we’ve had a tenant there for at least three or four years, and he’s a pretty good tenant too.
But what’s come up recently is the driveway is a bit of a mess and the tenant’s starting to complain to the property manager. The property manager is complaining to me. I’m complaining that I don’t have enough time to look after it, and the cost of about $10,000 to fix it is too much, I reckon.
There’s a lot of moving parts here and it’s a headache I don’t want to deal with, but my buyer’s agent, Steve Waters, tells me that it’s something I have to deal with; if I keep the tenant happy, that will improve the chances of him staying for even longer.
Now, I do get that from time to time, there’s emergency maintenance that needs to be done, like a blown hot water system, but this falls into preventative maintenance, and you need to make sure that you prioritise the right tasks.
This should be done through your property manager, and if they’re building up the right kind of rapport, whether they’re keeping your interests in mind or the tenant’s. Ideally, it should be a balance between pro-landlord and pro-tenant.
I have to admit, one of the shortcomings I have with our portfolio is that I probably don’t give it the level of attention I should at an administrative level. I’ll go through peaks and troughs on it where I do a lot of it and then I go, ‘Okay, that’s done.’ But it’s never just done. There’s always ongoing maintenance with property portfolios.
We could go ahead with a half-arsed job and fix it for a year or two, maybe go with a gravel route for $2,000, but it’s a $2,000 solution that will need to be done over and over, topping it up with more and more gravel.
If we put the money into it though and really fix it, it could see at least 20 years.
To do that, we need to organise someone to tear it up with some jackhammers. I could put in the sweat equity and do it myself, but there’s just not enough time in the day. No, the best route is to go with qualified, licensed, insured tradies.
I reckon if we go down a path of getting three or four quotes on a new driveway, you probably could get a few tradies out of the woodwork because they could make a good earn off it.
If I wanted to go with the easy route for a half-arsed job, finding the right tradie is a task all in and of itself, as there’s just not enough money in it for them.
Tradies these days, they’re so busy that little jobs like that, you can’t get tradies to do it. It’s impossible to do it. So, you’ve either got to do it yourself, get a mate to do it that you know, or do it properly.
It’s best to do it properly because if you do it half-arsed, you get a half-arsed job. You get a half-arsed service, and this is not a time to make a shortcut.