Inefficient Maintenance: The Biggest Controllable Contributor for Poor NOI
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In 2023, the average annual cost to maintain just one single family home in the United States hit a record high of $6,548. While costs have slowed since then, they have not significantly improved. At the same time, for most multifamily properties,the costliest line-item after payroll is maintenance. Because operating costs and property taxes are fixed, a controllable expense such as maintenance becomes an opportunity to reduce operating expenses. The right strategy and a tech-driven approach can dramatically cut maintenance costs and boost net operating income (NOI) for multifamily property owners, while maintaining a high level of resident satisfaction.
An Ounce of Prevention
Just like every person will inevitably have health issues, every property will need maintenance, and just as with healthcare, it’s better to be proactive than reactive. Having a plan and investing in preventative maintenance is a great way to reduce costs from emergency repairs. $1,000 to repair a rotten panel today is a great way to keep from spending $10,000 to replace the wall when wood rot spreads.
Trust but Verify
While we all want to believe in the best of our potential residents, a responsible property owner can save on maintenance just by carefully screening all applicants. Calling references can ensure new residents do not have a history of being irresponsible with their space. Depending on how long a resident stays in a unit, their security deposit may not cover the damage a property owner has to repair before the next family moves in, so a thorough background check can minimize the maintenance necessary both during and after each resident’s stay.
Property owners should also protect themselves by understanding their specific obligations in terms of paying for damages. Residents who cause undue property damage should be responsible for paying for the repairs (insofar as local laws and the occupancy terms allow). Even if this only covers particular cases, savings across an entire portfolio could be significant, and residents will be more careful about respecting their homes.
Unlike the security deposit accounting process, leading platforms like FacilGo even have chargeback functionality. Such platforms use AI to identify, log, and submit for approval any items residents may need to pay for. This ensures chargebacks are identified with minimal effort and go through all necessary approvals before being posted to the resident ledger. More importantly, these chargebacks occur near the time of the incident, which helps provide feedback to the resident to improve their behavior by making it much more likely to receive the chargeback amount versus sending them a large bill when they move out.
Do it Yourself
Specialists like plumbers are indispensable for many multifamily property issues, but property managers with a responsible and safe DIY attitude can save significantly on maintenance. Most sink and toilet clogs can be cleared with a drain snake or drain auger anyone can purchase. Likewise, anybody can check smoke and carbon monoxide detectors, replace heating filters, or touch up flaking paint. Just be sure to leave potentially dangerous tasks like electrical work to the pros.
Tech = Savvy
Technology is here to make everyone’s lives and jobs easier, and that is absolutely true for multifamily property managers. Revolutionary platforms like FacilGo can dramatically improve NOI by making teams more efficient. AI-driven software can guide team members through every step of the maintenance process, from planning to financial modeling to ordering materials and working with suppliers, vendors, and specialists.
FacilGo can reduce property maintenance costs by up to 35%, while raising resident satisfaction and preventing staff burnout to save on both resident and employee turnover. FacilGo is also unique in its space, offering a comprehensive process view of maintenance, and the ability to reuse valuable data throughout the residential management process.
By performing proactive maintenance, exercising reasonable caution with applicants, and investing in innovative technological platforms like FacilGo, property investors can enjoy a higher ROI and ensure a better experience for residents and team members alike.
Contact FacilGo to learn how your properties can enjoy superior performance today!
About The Author
Brand Chandler
Brad was the Industry Principal responsible for driving sales and development of Yardi’s Procure to Pay solution. Prior to Yardi, Brad was VP of Product Management at SiteStuff until the acquisition by Yardi in 2007. Brad brings over 25 years of seasoned leadership in the SFR and MF property technology market. He has a degree in Mechanical Engineering from the Virginia Military Institute, a Masters in Engineering Management from St. Martins’ College, and a Masters in Business Administration from the University of Texas at Austin. Brad also served as an officer in the United States Air Force.
