NEXUS PROPERTY MANAGEMENT 101: Should The Price A Tenant Is Paying For Rent Affect My Approach Toward Maintenance As A Landlord?

ARE YOU OBLIGATED TO DO MORE AS A RENTAL PROPERTY OWNER IF A TENANT IS PAYING MORE IN RENT?

As our Nexus team has mentioned for months, maybe going on years, the price of rentals is not going to decrease. Perhaps there’s some semblance of a plateau in the future but it’s much more likely that rental prices remain elevated going forward and continue to increase by as much as 10% a year until the sales market returns to something closer to normal. As long as supply is low, demand for rentals will be high, as will prices. We’re not looking to dive into any of that prognostication but instead aim to establish this context where more and more rental properties are bringing in historically high income. It’s those conditions that lead us to the following topic: Do landlords have an obligation to agree to more costly maintenance requests just because the tenants are paying more in rent?

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THE REASON THE ANSWER COULD BE NO:

As a landlord, you want your tenants to be happy. Happy tenants are paying tenants and paying tenants are at the heart of your financial strategy. However, that strategy also includes maximizing profits and saying yes to big ticket items or early requests can set a precedent where tenants have unrealistic expectations. Their paying more in rent doesn’t mean there’s more money in your pocket because the cost of insurance, utilities, mortgages, maintenance itself, and the other expenses that shadow an investment property have also gone up.

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THE REASON THE INITIAL ANSWER IS OFTEN NO:

Many of the higher end rentals Nexus manages were owner occupied before coming onto the rental market. Be it condos or single family homes, market trends over the last couple years have brought more and more property owners into the rental sphere, where just 5 years ago they likely would’ve sold their homes instead.

In most cases, they’ve moved on to something that better meets their needs and now that they’re renting to someone else they’re coming into the experience with one or more biases. The most common is the feeling that the home was good enough for them as it is, so why should they fix something up for this new person? Or similarly, “it was fine for us, they must’ve broken something themselves…we’re not paying for it”. The sentiment makes sense…but it’s not an effective strategy. It’s not a sound business approach. Often, property owners with these higher priced rentals aren’t getting into it as typical investors, but they need to make that jump to ensure they’re making the right decisions as often as possible.

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THE REASON THE ANSWER SHOULD BE YES:

As a landlord, your ultimate goal is hassle-free long-term tenancy. That means having the ability to trade in some short term discomfort and expense in exchange for an increase in the odds of smooth sailing later on. Perhaps there’s a fear that a precedent could be set but you always have the ability to say no…there’s no momentum that will make it harder for you to do so. You can still say no at any time, so that’s not a great reason.

The reality is that new tenants inevitably trip across several items that could be improved upon in the first 6 weeks of tenancy. In fact, if your new tenants don’t reach out to you with a request or two in the first month and half, that’s likely more reason to be concerned. Keep in mind, tenants are an integral part of the property management wheel: it is essential that tenants feel valued so they do their best to take care of your property. You want them to treat it as a home. This decreases expenses at the end of tenancy and increases the amount of time they stay with you. You want to create a relationship where tenants are encouraged to let landlords (or their property managers) know whenever there is a maintenance need. That’s the only way to ensure the property is in the best shape possible for the long haul.

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CONCLUSION AND NEXT STEPS:

Nexus Property Management® has been partnering with rental property owners for over 11 years and now has franchise offices in four states. We are committed to the principles that helped our Rhode Island office grow rapidly and the most essential is the focus on long term results. Our clients come to us with varying degrees of experience and the vast majority become effective investors in no time. Reach out to the Nexus team closest to you.

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Mick Lefort is the General Manager of Nexus' New Haven County Franchise Office and the Vice President of Operations for Nexus Property Management®, a National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.

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