In thinking about your investment, consider how to reduce operating costs for utilities and preventive maintenance.
Utilities
This is a difficult cost to control. If you pay the utilities, you will be at the mercy of every cost increase from the utility companies and unknown usage from your tenants.
There are three approaches a landlord might want to consider:
Approach 1: Split Meters
The Issue: For most properties, you will pay the water bill since typically there is only one water meter and no easy
way to split up water usage. The gas and electric, however, are a different story.
The Fix: Buildings with master-metered gas and electric utilities can easily be reconfigured to individual meters.
Approach 2: Get Eco-Friendly
The Issue: You can look to eco-friendly options for reducing electrical costs over the long term.
The Fix: Solar panels will greatly reduce, or in some cases, eliminate the electric bill.
Approach 3: Reducing Energy Consumption
The Issue: It is hard to keep track of power usage, especially when you don’t live at the property.
The Fix: Plan out energy consumption. Simply installing lighting sensors in communal areas like laundry rooms and
parking garages can save hundreds of dollars each year. Your local power company’s website will have numerous tips on
how to reduce energy consumption and save money.
Preventive Maintenance
Preventive maintenance can also save thousands. Being on top of issues before they become problems keeps the
building in tip-top shape and the property accruing the best returns.
The Issue: Properties with small maintenance issues typically result later in equipment failures, water damage, and
higher-than-necessary utility costs.
The Fix: Doing regular preventive maintenance to take care of little jobs before they become big.
Be on the lookout of the following items:
- Identify all the leaks in the building and get a plumber out as soon as possible. That one-time plumber bill for
identifying and repairing leaks will reduce your water usage and help avoid wood rot and mold. - Replace filters on HVAC units to help them run more efficiently and last longer.
- Seal windows and doors properly to not only ensure lower HVAC costs, but also keep little uninvited creatures
(think ants and cock roaches) out. - Check the shower grout for keeping tubs, showers, sinks, and toilets as water proof as possible to avoid costly water damage.
- Regularly test smoke and carbon detectors. Hard-wired units with battery backups are best, but check on these
life-saving devices regularly. Also, keep in mind that smoke and carbon detectors have a life span; be ready to swap them out before the manufacturer’s recommended date.