What Are the Most Common Major Repairs Landlords Make in Rental Properties?
People have been asking us on Instagram and through other channels what our most common significant repairs are in our real estate empire. Here are the capital improvements in order of frequency.
1. HVAC – (Air Conditioners and Furnaces)
Our portfolio is located in Houston, and if anybody knows anything about Houston, it’s HOT and HUMID all the time. This stickiness means a working air conditioner is a must-have for anybody, or you will be really sad, really quick. Luckily we have a great contractor who takes of these systems for us and is honest about which parts need to be repaired or replaced. Our HVACs all have three parts: the furnace, the evaporator coil, and the condenser. The condenser is the outside unit, which takes hot, humid air out of the home. The furnace is the heat source during the winter and can be gas or electric. The furnace also has the blower attached to it, which pulls air through the house. The evaporator coil is a bunch of copper tubes which pulls moisture out of the air as the blower blows air across it. We replace these components as needed, and sometimes all three need to be replaced if its an old system. Each piece is about $1,800 for us installed. Also, we run into a property with old ductwork, and we have to pay about $1,800 to replace it throughout the house with modern, energy-efficient ductwork. We see these pieces go down the most often, but new ones come with a 10-year warranty, which provides peace of mind.
2. Roof Replacement and Repairs
All of our homes except one has a standard composition shingle roof. The one outlier has a pesky tile roof. Eventually, when it fails, we will replace it with a traditional roof like the other houses. Typically, we either get a request from the insurance company that the roof needs to be replaced, or we get a tenant call complaining of a leak. We send out our trusty roofer, and he will assess if we can repair or if we have to replace it. A typical new roof cost about $5,000 – $5,500 for us. That job includes rip off of the old roof, decking repair, new tar paper, and then a 30-year shingle. The reason we have to replace a good number of roofs is that because we buy older homes. I used to think it was terrifying to replace a roof, but now it’s just two-thirds of an entire HVAC in terms of cost. Super easy.
3. Bathtubs and Tile Surrounds
Almost all of our houses have two bathtubs, and nearly all of them have a tile tub surround. Often these tubs start to rust after years of use, and the tiles get gross, mildewed, and grout cracks when tenants don’t use the fan in the bathroom to pull out the moisture after bathing. The tubs rust to the point that the tub deteriorates around the drain, and water starts to leak. No bueno! If just the tub surround is gross, we can often bleach the tile grout and re-caulk on the bottom tile where it meets the tub, and we are good to go. However, sometimes we have to replace all the tile, or in extreme cases, the tub AND the tile. We also replace the faucet and tub spout at the same time. Below you can see an especially bad case. The tile was spongy against the wall to the touch as, before the current code, you could add tile on top of sheetrock. Once the grout cracked, and moisture got inside, then the drywall would fall apart and mold, leaving the whole wall of tile in jeopardy. To replace the tub surround and faucet only, we pay about $1,400 for labor and materials. If we need a tub as well, we get to $2,000.
4. Countertop Replacement
We buy old houses, and it’s our bread and butter. Most of the time, those houses have the original Formica countertops. Some of them are very nasty and have burn marks all over and generally in disrepair. Other times they are too dated and ugly. We often replace the countertops in both the kitchen and bathrooms with granite. Our countertop guy is fantastic and replaces the sinks and well. He charges a ton to do the plumbing, so we use our handyman to come in after and install faucets and garbage disposal. The average cost to do the kitchen and bathrooms, including sink and faucets, is about $3,700. Here are some pics of a before and after on house #55.
5. Water Heaters
All of our homes have water heaters, of course. About half the units are gas-powered, and the others are electric. These units can last a long time, but often we have to replace them after years of constant use. Our handyman tries to save it by repair thermocouples, connectors, or other parts, but often they need to be trashed and start fresh. We can replace a whole unit for about $650. Our guys will go to The Home Depot, purchase a new water heater with our approval via text, and then install it. Then we will have reliable hot water for years to come.
Lessons Learned From Years of Repairs
These are the most frequent repairs we deal with each day as landlords and property managers. At first, they used to scare me; I couldn’t imagine having to pay to replace an entire HVAC. However, now it’s just part of the game, and we’ve gotten really good at playing it! If you know what your repeated expenses are, you can find a way to reduce their costs and frequency, and that will help increase your cash flow over time.
