You know that saying ‘there’s a butt for every seat’?

That’s true. There are different types of people in this world.

One of my coworkers likes to travel the countryside in her van and mountain bike. Personally, I hate road trips, mountains, and bikes. The only good thing about road trips is Cracker Barrel, and trying to hike a mountain almost killed me. I’m pretty sure my cookie cutter, suburban home with a HOA and social committee would make my co-workers wanna vomit. My idea of spicing it up was to paint one of my walls a dark emerald green.

In my experience that’s pretty true in real estate as well.

Some investors want to have a house at the top of the market to attract the very tip top rent rate and absolutely stellar tenants.

Others want middle of the road, not the nicest, most expensive, cheapest, or worst.

There are others who just want to provide a functional home at the lower end of the rent rate with no bells or whistles.

As long as you are not a slumlord who bypasses legal and ethical protocols, there isn’t a ‘right’ or ‘wrong.’
Each of these is fine.
Each has pros and cons.

Move-In or Move-Out Inspection
We provide our tenants with a simple inspection form when they move-in. They can document the condition of the property and any cosmetic defects. This can make conversations a little easier if they don’t agree with charges to their deposit when they move out.

• • Exterior Structure
  • Landscaping and Lawn
  • Garage and Sheds
  • Plumbing: fixtures, hot water tank
  • Electric: light bulbs, outlets, and fixtures
  • Finishings: hardware, smoke detectors, fire extinguishers
  • Doors, Drawers, and Cabinets
  • Flooring
  • Walls and Trim

Operational Property Inspection
Additionally, we perform a more detailed inspection for internal use. Our internal inspection includes everything provided to tenants, as well as the items below. We don’t provide this inspection to tenants because we believe in making things simple. Since the property inspection is long and technical it could easily confuse or overwhelm tenants.

This inspection allows us to ensure the property is compliant with landlord-tenant laws, it keeps our property owners in the loop, and it allows us to handle repairs more smoothly.

If you don’t want to manage a more lengthy inspection you can probably get away with a simple move-in and move-out form. However, if you are managing from out of state and/or managing a high volume of properties, “more is more” when it comes to documentation.

• • Appliances
  • Location of Major Mechanicals: electric panel(s), clean out(s), HVAC system(s), attic access(es), hot water tank(s), etc.
  • Age of Major Mechanicals: electric panel(s), clean out(s), HVAC system(s), attic access(es), hot water tank(s), etc.
  • Serial Numbers: appliances, major mechanicals
  • More detailed/prescriptive photos
  • Section 8 Notes
  • Entry Points
  • Attic and Insulation

Oklahoma has stupid weather, We love Oklahoma, it’s our home… buy we have very few nice things to say about the weather. The level of maintenance required in Oklahoma (because of our weather) can be a bit of a foreign concept for investors who live in places like California. We want to help understand the preventive maintenance options in Oklahoma, because it’s so important to the health of your investment.

HVAC Service (spring/fall)
The HVAC in your house can be worth $7000+ (and on an $80,000 home that’s a lot!). You want to make sure that you are taking care of it and extending its life as long as possible.

Scour Plumbing Line
In layman’s terms, this just means you push a bunch of water at a high pressure through the plumbing lines to clear them of build up, root growth, and debris. If your plumbing is newer, this likely isn’t needed. But if you have an older property, or a property with mature landscaping it can be helpful to scour the plumbing lines to prevent a main line replacement.

Gutter Cleaning (annual) and Lawn Clean Up (spring/fall)
Trimming the tree branches back away from your roof lessens the damage when we have another ice storm (and there will be another ice storm). Large branches falling can mean insurance claims for tenant cars being totaled, roofs needing replaced, electric risers being ripped from houses, and costly debris cleanup from the yard. It’s also worth nothing that if you pay for a new roof when thousands of others need a new roof, supply and demand will likely force you to pay a little more.

Pest Treatment (annual)
If you own a multifamily property, this is required. If you own a single family property, pest control is likely outlined as a tenant responsibility. However, this is an item that is very inexpensive to prevent, but can become incredibly expensive if tenants let it get out of hand. We strongly encourage owners to treat properties annually, even if it’s just having a handyman spray the home with treatment from a hardware store.  

Dryer Vent Cleaning
Please clean out your dryer vents. If you’ve ever been on the internet you’ve probably seen those ‘Today I Learned’ articles. At least once a month I see one from someone who didn’t know you needed to clean out your dryer lint catcher after every load. I’m not talking about the actual vent to the exterior, I am talking about the lint trap that’s in the dryer. (PS if you didn’t know, no judgement, today YOU learned.)

Siding/Exterior
When the budget is tight, we usually see this removed from the list first. Checking your siding/brick and your soffits to make sure they’re in good shape and watertight (and squirrel tight). Otherwise you might end up with a new feral pet, chewed electric wires, or a leak. A small water intrusion can easily become thousands of dollars in sheet rock damage, mold remediation, or electric corrections.

No matter what type of investments you hold, you need to spend money to maintain the integrity of your investment. Predicting how to calculate CAPex can be overwhelming, and while you have a responsibility to understand your investment… numbers only get you so far.

You can make the perfect CAPex spreadsheet. You can divide the cost of new mechanicals by the remainder of their expected lifespan to determine the amount you should be saving to prepare.

But in reality, your CAPex plan won’t go perfectly according to plan. The lifespan of mechanicals isn’t precise because ongoing maintenance, usage, and weather patterns impact the mechanical items. Plus prices fluctuate.

Does this mean you should skip this, because it will end up changing? Nope.

Does this mean you should hold off on purchasing until you know all the inner workings of CAPex? Nope.

Go slow, learn along the way, and have a “plan b” for if something goes wrong.

• A higher preventive maintenance budget keeps your CAPex budget lower
• You must learn to run your own CAPex numbers (because home sizes vary so greatly it’s nearly impossible to run numbers on general percentage averages)
• Put aside a financial reserve (and plan to use the reserve faster than you expect)
• Consider financing bigger repairs if they come at a time when you’re not prepared to shell out extra cash

Examples of CAPex Expenses

• Gutters
• Crawl Space Covers
• Adding Insulation: attic, plumbing
• Flooring
• Painting
• Updating Bathrooms and Kitchens
• Electric: panel, wiring, fixtures
• Plumbing: main line, internal lines, fixtures
• Water Heater
• Windows
• Heat and Air Systems: condenser, furnace, ducts, supplementary  sources
• Landscaping
• Exterior: roof, siding, eaves
• Big Makereadies