Posted in Blog  
  on Mar 18, 2016

Everything You Need to Know About Hiring On-Site/24-Hour Maintenance

A major maintenance issue can leave you holding the bill for thousands of dollars in repairs. A burst pipe can pump hundreds of gallons of water onto your property and leave a flood of damage behind. An electrical issue can quickly lead to a fire. Timely response to reported maintenance issues can dramatically reduce the number of major problems.  Having a member of your maintenance team live on-site so that they may respond to an emergency if needed is one way to keep those big bills at bay. The trick to getting that continuous maintenance lies in finding the right person to hire.

Choosing the Right Type of Maintenance Worker

Before hiring someone to tackle the everyday problems that crop up with rental properties, it is important to judge the potential cost savings. Is it cheaper to use an on-call handyman service or install a resident property manager? What are the pros and cons?

Before you can decide, you need to look at your current expenses. As an industry standard, you should be setting aside approximately 1 percent of the property value for maintenance each year. Fannie Mae suggests a 2 percent holdover for maintenance. Even if you don't spend the money in the current year, apportioning these funds can help with major capital repairs like a new roof. Once you know the expected costs for all of your properties, you can make some decisions regarding the type of maintenance worker.

Contracted Service Provider

Choosing an on-call handyman service helps reduce the amount of paperwork on your end. The workers are not your employees, and you only need to deal with invoices as they are generated. Anything you spend on the service is tax-deductible at the end of the year, and you can stack repairs to get the most out of every service call.

The downside is the wait time between an issue and the repair. If tenants know that you will need to schedule a repair, they may wait to report a problem. Quality is another issue. Even if you work with the same service provider, you will likely deal with several workers, all of differing skill levels.

On-Site Property Manager

If you bring in a worker to handle these calls, you suddenly have an employee, and if your employee works full-time, you need to set up a compensation plan. You might want to include showing and listing apartments as part of the job duties, in addition to tackling maintenance calls.

Depending on the situation, you might be able to avoid paying employer taxes if you offer a live-in situation. Some states and cities, notably California and New York City, require a live-in property manager for buildings with a certain number of units (16 in California and nine in NYC). When you hire a live-in property manager to deal with maintenance and vacancies, you can avoid federal payroll taxes as long as:

  • The manager lives in one of your rental properties.
  • Lodging is offered for your convenience, not the employee's.
  • You require the employee to live-in as a condition of employment.

Contracted Property Manager

Another solution is to contract out the services of a property manager without offering a live-in situation. If the manager works for you, you need to ensure that you file and pay all appropriate employer taxes and handle issues like paid time off, worker's compensation insurance and healthcare.

If you need a full-time property manager or could lower your maintenance costs, consider offering in-kind value, for example, offering rent reduction for services rendered. Hiring an on-site manager is often the best way to get round-the-clock maintenance service at the lowest cost.

What to Look for in a Property Manager

If you've decided to hire a live-in manager, you need to start looking at qualifications and skills. People with certifications as journeymen plumbers and/or electricians can handle most maintenance tasks. They can usually install a water heater or other appliances, repair an outlet or fix a leaky faucet. If they don't already have painting and landscaping skills, these are fairly easy to acquire.

Since journeymen in trade professions are licensed to work independently, it might be even more cost-effective to find someone who has worked in the construction field but not pursued a license. Before hiring anyone to take on a live-in position, it is a good idea to obtain a criminal background report and run a reference check. The more you know about previous on-the-job performance, the better your hiring decision will be.

Avoid Endless Onboarding With Good Hiring Practices

A live-in property manager handles a lot of day-to-day maintenance and helps keep units generating income. When choosing someone for a trusted position, it is always a good idea to demand an extended probation period. That gives you an opportunity to see how the prospective hire performs while working for you. You can see how the worker tackles different maintenance jobs and get feedback from your tenants. You'll want to see how your employee handles showing an apartment, prioritizing repairs and prepping apartments for turnover. Taking the time to hire the right person can help you keep a good employee for years to come.


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