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Author Topic: $109 per hour Maintenance Man  (Read 8168 times)

Offline propertymanager

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$109 per hour Maintenance Man
« on: February 10, 2007, 07:08:15 am »
This has been a busy week.  We've had the coldest weather here in many years and I had frozen water lines in 4 units.  During this time, one of the tenants had a toilet that wouldn't flush correctly.  He tried plunging it.  I tried a toilet snake.  Nothing.  Since I was working on water line issues, I called a plumber to work on the plugged sewage line.  The plumber removed the toilet and used a 50 ft powered snake which fixed the problem.  This cost $114 (including $5 for the new wax ring).  So, for about an hour's work, the plumber made $109. 

That's why I do all the maintenance myself.  That $109 was the entire month's cash flow for that unit.  Am I willing to do an hour's work for $109?  Yes!

This is also why it is so difficult to make money with paid management and paid maintenance.

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline DannyTheGreat

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Re: $109 per hour Maintenance Man
« Reply #1 on: February 10, 2007, 08:47:38 am »
$100 for an hour of work as a plumber.... $100 for a month of dealing with tenant fun and excitement. Sounds like your in the wrong business my friend.

Mike's Property Management and Maintenance, LLC
"I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."- Isoroku Yamamoto, Japanese Admiral- After the attack on Pearl Harbor

Offline propertymanager

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Re: $109 per hour Maintenance Man
« Reply #2 on: February 10, 2007, 09:42:03 am »
No, I'm not in the wrong business.  If I were a plumber, I'd have to work 8 hours every day, which is not part of my plan.  However, in the real world of residential rentals, that money lost for silly little maintenance jobs is significant. 

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline Frank Chin

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Re: $109 per hour Maintenance Man
« Reply #3 on: February 10, 2007, 09:46:28 am »
Mike:

I've been fortunate to have bought my properties over 25 years ago, and they currently cash flow very well, over $1,000/unit for some. In the recent RE surge, the values of 3 families gone from 450K to 850K in a few years.

I have the luxury of splurging for some help.

For the SFH though, I got my tenants doing repairs for less than $200.00. There's one the tenant loves to write us a monthly letter with the rent check, and they just reported their adventures in replacing some plumbing and a faucet at a cost of $150.00.

As for the multi's, I do call a plumber, no more than 6 times a year, on nuisance stuff, even changing washers. The guy I use has a minimum charge of $75.00 per visit, and I found it well worth it.

For the first dozen years of REI, both my wife and I had stressful jobs, and we looked at using plumbers and handyman as necessary evils. The last few years, with nice cash flow, we sat back and relaxed.

One time, the wife thought $75.00 for a washer was a bit much, and bought one over to the rental, and found it to be the wrong size. So she drove over to a local hardware, got another one, took it back, and it was also the wrong size. Unfortuantely, here in NYC, it's not a simple matter to finding parking in front of the place, and each trip takes 45 minutes, looking for parking standing in line etc. Unfortunatley, on the third trip, the store closed, and she had to return on another day.

Where was I?? I told her not to bother, I relaxed at home, and after this, neither did she.

There was a family friend, who got started a few years after us, cashed flow a little less than us, and found it necessary to do all the repairs himself, on top of his and her regular jobs. The last I heard, a few years back, they gave up on RE as couldn't keep up with tenant problems.

Apparently, they also gave up on the biggest runnup in prices here. It's hard for me to say if I'm ahead, or my friend is ahead, for taking his profits early, and doing all his own maintenance.

In the case of one 3 family, the previous owner insisted on doing all his own maintenace, and I found so many things done wrong that I was surprised the place didn't burn down. In one case, the light in the bathroom stopped working, and on opening up the wiring in the walls, he used "extension cord cables" that burnt out.

For this rental, which I finally sold, we had a leak a week inside the walls, which necessitated chopping holes in walls, and then repairing them. Unfortunately, I found few handyman that would come to fix one hole, so I resigned myself to patching up big holes, little holes, large sections of wall needing metal lathing.

Bottomline, I could do it if I wanted to, not that I don't know how. In fact, the house where I reside, there's about dozen holes resulting from repairs I haven't gotten to, which I'll get to work on as soon as the wife starts hollering.

Not all of us can make the time, or have the ability you have in doing maintenance. Consider yourself lucky. that you can do it.











Offline gsuidiot

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Re: $109 per hour Maintenance Man
« Reply #4 on: February 10, 2007, 04:57:12 pm »
That's why I do all the maintenance myself.  That $109 was the entire month's cash flow for that unit.  Am I willing to do an hour's work for $109?  Yes!

Mike, I have to question if this was truly your cash flow profit on the unit.  You always stress the importance of purchasing a property with the 50% real world operating expenses used in the NOI calculation.  I agree there are a ton of expenses people do not usually consider when making a purchase...I was one of those people when I bought my first place this past year.  However, doesn't your calculation take into account repair and maintenance costs on the building?  So your $109 should have already been included and you're still cash flowing on the unit...

Personally, I'm doing most repair work myself.  I weigh the total costs of the job, including my time vs what it would cost for me to get it hired out.  For a beginner, I have to include the tools for the job (powered snake) and determine if the purchase would make sense or if it's a one time deal.  In this case, I would gladly pay $100 and not risk a cracked toilet bowl or some other big problem I would probably run into once the toilet was torn off the floor.  Also, I'm not a professional plumber and the job would take more than an hour.

Other projects I have done myself included a new shower install, hanging a ceiling, and minor electrical/plumbing.  Every job is different and every day has different responsibilities (working 55 hours a week).

I guess the reason for responding to this is so everyone realizes it's ok to hire away your problem once in a while.  If you bought correctly, you shouldn't have to deal with the additional stress of a second career in contracting.

Cheers,

G

Offline propertymanager

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Re: $109 per hour Maintenance Man
« Reply #5 on: February 10, 2007, 06:08:21 pm »
Quote
However, doesn't your calculation take into account repair and maintenance costs on the building?  So your $109 should have already been included and you're still cash flowing on the unit...

Yes, you are absolutely correct.  However, that doesn't change the fact that by using the plumber, I lost $109 that would otherwise be in my pocket.  I agree with you that it may be difficult to do all the maintenance yourself if you have a job.  In my case, it was impossible to do this repair even though I don't have a job. 

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline dwj469

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Re: $109 per hour Maintenance Man
« Reply #6 on: February 10, 2007, 09:12:44 pm »
yeah I have no choice but to pay the piper. My intention from the beginning was to have somone else do it in the way of property management. I would rather pay someone else to take care of the properties because of ym ong term goal of having many properties. So I just take that into consideration when buying a property as part of maintenance costs. Ta write off.
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Offline AzonPM

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Re: $109 per hour Maintenance Man
« Reply #7 on: February 12, 2007, 05:50:08 am »
I wish I could use that plumber here!  That would have cost me over $250. 
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Offline propertymanager

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Re: $109 per hour Maintenance Man
« Reply #8 on: February 12, 2007, 06:00:04 am »
Code: [Select]
I wish I could use that plumber here!  That would have cost me over $250.

AzonPM,

Here's a win-win deal (like the gurus are always talking about).  If you can keep me busy as a plumber, I'll move to your area and only charge you $249 per hour!  You save money and I make money.  A true win-win!!! 

Can I start tomorrow?

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline AzonPM

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Re: $109 per hour Maintenance Man
« Reply #9 on: February 12, 2007, 06:02:23 am »
I'll even pay for your plane ticket  :beer
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Offline Bluemoon06

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Re: $109 per hour Maintenance Man
« Reply #10 on: February 12, 2007, 09:43:28 am »
No, I'm not in the wrong business.  If I were a plumber, I'd have to work 8 hours every day, which is not part of my plan.  However, in the real world of residential rentals, that money lost for silly little maintenance jobs is significant. 

Mike

propertymanager is right as I say it not about the money it is about the lifestyle.  You can always get a job to make money, what real estate gives you is the freedom to have the lifestyle you want.
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Offline oldmandate

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Re: $109 per hour Maintenance Man
« Reply #11 on: February 12, 2007, 07:48:28 pm »
So this guy hires a plumber and after a couple of hours of work the plumber hands him a bill for $1000.  The guy looks at the bill and says "A $1000?" WHO DO YOU THINK YOU ARE?  A HEART SURGEON?  The plumber says: Yeah! I used to be one...

I got burned paying a ton of money to a plumber for very little time he put in.  I have no problem paying a plumber $70-$80/hr but what really burns me is them bidding on jobs.   You know how that works.  They bid a job when you are in a bind and when they're done and you figure out how much they made per hour you think to yourslef "I just got rapped!!!"   
Never again would I do a bid per job.  I would want an hourly rate and I would want to be there watching him the whole time.
:beer

 




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