In house repairs and maintenance team

#1

We have traditionally used 3rd parties for all repairs and maintenance. We have one main provider for all ‘handyman’ work and they are our busiest tradesmen. Recently they raised their prices and instituting a few rules like minimum call out charge.

Its not easy to find another provider so I am considering other options.

One would:

  • Hire a Head of R and M (pay him wages or commissions, or a mixture)
    -Task him with building a team of tradies that work for us
  • Divert all business to our in house team
  • Charge LLs the historic pricing we got from our 3rd party trademan before he hiked his rates (so LL is not disadvantaged and all is transparent)

Anyone done anything similar?

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#2

Not sure why this is such a big deal.? Prices go up all the time. Why should Tradies not have the sme right? We increased our PM fees a couple of years back to stay on top of our rising costs. Just a fact of life that we all have to put up with.

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#3

I like the options here but this could be a lot of work. You would have another side of the business that would be valuable though in terms of a sale in the future.
Another option is to set up regular work with referral partners.
Meaning, that if you give them work, they need to give you some referrals. There are some structured groups like this around. We joined one and our ROI has been fantastic, plus we have good relationships with quality tradespeople.

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#4

Hi Kevin! No issues with tradesmen raising prices in a reasonable manner, but if I can find a more cost effective way to repair/maintain our Landlord’s properties then I think that’s something I owe to our Landlords.

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#5

Hi Rebecca! Yes, I agree it would be a lot of work. Interesting point about referrals. WE often receive referrals from our tradesmen, but no formal structure around that. Perhaps something for us to consider, thanks.

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#6

Olly, you should talk to Melanie from QAC (Queenstown Accommodation Centre) they are successfully running this system and have been for about 3 years.

It is a very good point of diference for them, this person also helps with inspections and does small maintenance “FREE” for the landlords from time to time…

Let me know if you want me to put you in touch.

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#7

No problem with your thinking. I just think that our panle of Tradies are tried and true and it’s quite difficult to enggae new ones! Good luck with the problem. Plesase let us all know what you come up with as a final decision. Thanks.

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#8

Yes please! Thanks

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#9

We have dabbled with the idea on many occassions. Don’t think we have a big enough rent-roll but the idea certainly has merit.
Need to do the sums as to how much you pay out and will it cover wages / insurances / costs - great for someone who is about to retire that does not want the headache of running their own business

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#10

@oliver we had had issues culturally with this model here in Oz. Landlords here see maintenance as a conflict of interest and are concerned PM are reporting non-essential maintenance to prop up their maintenance side of the business.

The USA do this model really well so it would be nice if we had some US members that might have some experience in this space. I do know though that businesses I have worked with in the USA seem to create their own reliability issue, internally, where the maintenance side of the business tend to relax and repair times blow out, because they see the PM side as an internal customer.

@mike I’m not if you have any experience here

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#11

Hi Adam!

Yes, a lot of experience in this area. For the first 30 years, our company never had a maintenance company for that very concern that clients and prospective clients would not want this. The thought that there would be a perception that would be maintenance done unnecessarily, marked up to absurd levels and so on. The issue was sometimes we did not have control over the maintenance contractors despite having some good relationships.

3 years ago, we set up a small maintenance company (4 guys). It is more labor intensive than property management but it has really helped us get caught up on our maintenance. In addition, we are able to say that we still have a tremendous amount of independent companies that they can choose from for a second bid. Our resident work orders are written or submitted via email (unless something critical like a fire) so we point out it is not us requesting the work orders done (you can point out that as property managers, life would be great for everyone if there was no maintenance!).

Personally, I would only recommend that you set up a maintenance business if you have a good control over your property management business as well as you start small and build as necessary.

Feel free to ask questions! I hope this helped.

Cheers.

Michael

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#12

Thanks @mike for the detailed overview. It seems like to managed to navigate through the concerns, which is great.

@oliver I wonder if it might be worth reaching out to @mike direct for a quick chat?

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#13

My pleasure Adam!

Whatever I can do to help!

Michael

#14

HI Mike, thanks for the overview. I have been toying with the idea on and off for a few years now. I am currently in a position where our contractors have gone up North Chasing big money and closed their business’s down or they have got on board with the huge amount of building and we have a huge time delay in getting contractors out… Would love to chat this through in details some more if you could spare the time

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