Imagine, if you will.
You get a bill from your Property Manager and see the hourly rate for a Maintenance Technician at $95 per hour. You may think it is excessive, or that a handyman equals cheap labor. You also may start to wonder if you should do it yourself, or find cheaper options.
You call your Property Manager, and they tell you that the $95 hourly rate is a preferred one for clients and that the true market rate may be higher than that.
How could that be?
Maintenance Technicians, or handymen are important in the real estate business. Nobody ever questions that a handyman is hard to find, yet still, people may argue or complain about their cost. It seems they just do not seem to understand what’s involved.
Hopefully, a better understanding of the costs shed light on the value of maintenance and repair expenses. Here are 12 reasons maintenance work should be rightfully valued. These apply to both fixed bids and hourly rate bills:
- Inflation: although we may remember old prices, the cost of labor, materials, and gas has shot up over the last few years.
- Skilled labor: being a maintenance technician is not unskilled labor. They have a special skill set and need to be able to do different tasks. They need to know how to paint & patch, handle light plumbing issues, do minor electrical work, and more. They also need to know what is beyond their area of expertise and what to do in those situations.
- Trust: the residential maintenance technician needs more than just mechanical skills. These technicians need to be trustworthy and dependable. They are going into people’s homes, usually on their own. They must be respectful, presentable, and have good judgment. Would you let them be in your home unsupervised? If not, don’t send them into your tenant’s home.
- Time: maintenance people must be time-conscious, punctual, and work on schedule. Many of these repairs are time-sensitive. Plus, they can’t take too long to fix a small problem. Time is money.
- Tools: a technician needs tools. Sometimes the tools are property of the company, or the technician has their own. Tools may seem like an investment. Some wear down over time, break, and sometimes get lost or stolen.
- Transportation: unless they are a permanent “on-site” technician they need a truck or van to get to the property while carrying tools and materials. Other expenses include gas, wear and tear, auto insurance, and vehicle depreciation.
- Time off-property: when paying a technician, you also need to factor in the hours the technician is in company meetings, training, vacation time, sick days, and any other non-billable time and expenses.
- Non-technician time: there is administrative labor that goes into maintenance orders like billing, scheduling with tenants, getting owner approvals, and project supervision. These tasks might be involving and exceed the normal property management functions.
- Contingency: sometimes, mistakes are made that need to be fixed and can’t be billed for. This is part of the business that needs to be built into the pricing.
- Insurance: this is a big expense. There is general liability, worker’s compensation, employment practices, and employee theft insurance. This does not include health insurance, which more and more employees are requiring. You may want to ponder before cutting corners by having uninsured people work on your property. FYI - if a business that has worker’s compensation insurance hires a single person or independent contractor who does not have worker's compensation, the business having the worker’s compensation will have to pay the premium or lose all coverage.
- Planning fallacy: people often underestimate how long it will take to complete a task. Psychologists call this phenomenon the planning falacy. People in the maintenance business learn the hard way that it always takes longer than you think to get things done. What you think will take 10 minutes may take an hour but may take you half a day. Things like: Allowing enough time for parking; what if you cannot find a space? Time for gathering and carrying your tools. Do you have the correct light bulb with you? How about the time it takes to pick up a part at the store? Do you have to wait in line and what if you have to go to a second store? Or what if a latter is not quite tall enough? Researching and ordering parts take time. Someone must go take measurements to fit an appliance. What if they are wrong?
- Profit: above all, maintenance people are scarce resources who need and deserve to make a living just like everybody else. A business also must operate at a profit, or they cannot be there for you. As much as a business sincerely cares about its clients and wants to help, it cannot do so by operating at a loss.
We hope this gives a better understanding as to why things cost what they do. Our experience is when clients understand, they do not mind paying. Ultimately, hiring a quality maintenance technician saves you time, and money gives you peace of mind, and protects your valuable investment.
Maintenance is such an important topic that we will be doing an additional Mike Explains about the risks and perils of cutting corners on maintenance. If you have any other questions about maintenance, property management, or real estate sales, please feel free to reach out. We will be happy to help.
Dunfee Real Estate Services, Inc.
DRE # 02026232