Are you looking to scale a commercial property portfolio without bleeding cash on unnecessary repairs?
Every property investor wants their portfolio to grow as quickly as possible. Which means more buildings. Which means more maintenance.
Scaling without a maintenance strategy will bleed your bank account dry.
Fortunately, a proactive approach to property maintenance can drastically reduce costs, protect the value of your buildings and keep tenants happy. No matter how big your portfolio grows.
What you’ll discover:
- Why Maintenance Strategy Is Critical When Scaling
- Reactive Maintenance Costs Way More Than You Think
- Invest in a Licensed Plumbing Technician for your Properties
- 5 Must-Know Maintenance Strategies for Scaling Commercial Portfolios
Why Maintenance Strategy Is Critical When Scaling
Maintaining one commercial property is hard enough.
When you start scaling to five, ten, or twenty properties, it’s a game of perfection. If one system goes down in a single building, you’ll start receiving tenant calls from every property who had the same issue.
Instead of handling these calls, you’ll be scrambling to find trustworthy contractors who can hit the road and fix your problems ASAP.
Determining how to maintain plumbing systems with just one property can be difficult without expert commercial services. Throw twenty properties into the mix and you’ve got yourself a potential money pit. Not only do plumbing issues take months off of your commercial building’s life, but they also cost tens of thousands of dollars in water damage if they’re not addressed early on.
That’s why having preventative maintenance, and specifically a licensed plumbing technician coming to your commercial properties on a schedule you define is one of the best things you can do for your investment.
Here’s an example:
A few years back, a property owner had twenty different commercial properties. All of them had burst pipes because there was no maintenance contract or scheduled maintenance visits.
If one building has a burst pipe and you don’t have a maintenance plan in place… that single repair call is going to cost more than paying for a licensed plumbing technician to visit all twenty buildings once a year.
Commercial property management is BIG BUSINESS. Industry research forecasts the market will grow by 7.1% through 2033. That means larger portfolios, increased competition and tenants who won’t tolerate poorly maintained buildings.
If you plan on scaling your portfolio, you better have a plan to maintain those assets.
Reactive Maintenance Costs Way More Than You Think
“How bad could reactive maintenance be?”
About five times more expensive than you think.
Let’s take a look at the numbers.
According to Honeywell, reactive maintenance costs building owners 2-5x more than scheduled maintenance services. So if you think you’re saving money by skipping the licensed plumbing technician visit this month, you’re actually setting yourself up to spend five times that amount when something breaks down and needs to be fixed immediately.
Not only that, but most emergency services like plumbers charge you 1.5x – 3x their normal rate for after-hours emergency calls. It doesn’t care if it’s 2am on a Saturday. When that pipe decides to burst, you’re getting hit with a massive bill.
Imagine now, those expenses happening across not one, but fifteen different commercial properties.
Reactive maintenance will:
- Increase your monthly operating costs significantly.
- Cause unexpected disruptions for your tenants.
- Lead to longer periods of vacancy.
- Accelerate the depreciation of your building.
- Inflate your insurance costs.
Have a licensed plumbing technician come out and assess the state of your pipes regularly. That tiny leak can turn into an expensive repair job if left undetected by a professional.
Invest in a Licensed Plumbing Technician for your Properties
When was the last time you checked your buildings for leaks?
No really. When?
While plumbing is often one of the last systems property owners think about, it should actually be one of the first. Compared to electrical, HVAC and roofing, water damage is one of the most catastrophic things to happen to your commercial building.
A licensed plumbing technician can help you properly maintain all your commercial plumbing needs. From catching those small leaks before they become major headaches, to keeping you up to date on local code changes. Not only will a licensed plumbing technician save you money, but they can also save you from some costly fines.
And there’s the insurance factor too.
A documented maintenance plan that includes regularly scheduled licensed plumbing technician visits can even decrease your insurance bill.
5 Must-Know Maintenance Strategies for Scaling Commercial Portfolios
How do you scale a commercial property portfolio without going broke?
Build a proactive maintenance strategy. Here’s how:
Build a Preventive Maintenance Schedule
Maintenance calendars are your best friend. Make sure you have one for every property in your portfolio. Plumbing, HVAC, electrical, roofing and fire safety systems should all be included.
Centralise your Maintenance Management
Speaking of calendars, once you start scaling to 10+ properties, a basic calendar is not going to cut it. Do yourself a favor and invest in a property maintenance management tool to keep everything organised.
Partner With The Right People
Relationships are everything in commercial real estate. Make sure you’re building strong connections with a licensed plumbing technician and other licensed trades that you’ll be relying on when something goes wrong.
Budget Appropriately
Maintenance budgets are often the first thing people cut when looking to reduce spending. Having a budget that’s 2-4% of a property’s replacement value is recommended. You’ll be thankful later when that HVAC unit decides it wants to retire mid-January.
Quarterly Portfolio Maintenance Review
Every quarter, you should be sitting down and reviewing the maintenance needs of your portfolio as a whole. Are there any trends? Maybe one of your buildings is consistently exceeding budget. Or perhaps residential properties require more licensed plumbing technician visits than office spaces.
Once you know what maintenance struggles your properties are having, you can make more educated decisions on where to scale and where to pull back.
Bringing Your Maintenance Strategy Together
If you’re going to scale your commercial property portfolio, you better know how to maintain those assets.
The most successful property managers invest in their buildings through preventive maintenance, building strong relationships with qualified tradesmen, and tracking every corner of their portfolio through a centralised maintenance management system.
Remember:
- Schedule regular maintenance for every property.
- Have a central place to manage all your maintenance activities.
- Hire licensed professionals to take care of your facilities.
- Budget according to industry standards.
- Meet with your team quarterly to review the entire portfolio’s maintenance history.
