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Avoid the Hidden Costs of Rental Maintenance to Improve Your ROI

By: Gregg Cohen, CEO, JWB Real Estate Companies
August 21, 2019
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Save 25% or More on Rental Maintenance

Excessive rental maintenance costs are the biggest pain point of property investing. If you’re involved in rentals or considering rental property investing, you’re acutely aware of this.

JWB recently helped a new client save a boatload on maintenance costs. The story is worth telling because we know it’s something you’ll appreciate (and want to replicate.)  Here’s what happened…

Rental Maintenance Gone Wrong

Matt and his family own 90 rental properties in Jacksonville and they previously hired a different property management company. Unfortunately for Matt, it just wasn’t working out. He experienced high maintenance and vacancy costs as well as poor communication from the previous property manager – a deadly combination when it comes to a passive income rental property portfolio.

Matt did his research and decided to bring his portfolio to JWB. During the transition, he found out that the previous property management company still had tens of thousands of dollars of unpaid invoices with vendors who had done work on his properties. It was a mess!

Intervention and Leverage

Our team jumped right in to help. We noticed that some of the invoices were with vendors that we also use on our projects here at JWB.

However, the rates for the services provided were very different. JWB is able to negotiate volume pricing discounts with our vendors because we start over $1 million of construction each month. The previous property management company simply accepted the fact that their clients were being charged market rate by the vendors.

This was an interesting scenario, though, as these vendors already did the work at the higher rate. They just hadn’t been paid yet.

We picked up the phone and explained that the client now was with JWB Property Management. We asked our vendors to match the JWB discounted price….and they did!

Widespread Rental Maintenance Savings

For example, Matt had to replace a brand-new air-conditioning unit in one of his properties. By leveraging JWB’s vendor network, he saved 25% right there!

Can you imagine how much savings that meant across all 90 houses? And think about the impact of that savings over the next 5, 10, or 20 years that Matt continues to own his rental properties!

Advice for Investors: What This Means for You

Savvy investors understand that deeply discounted rental maintenance costs are one of the most impactful drivers of hitting your return expectations over the life cycle of the investment property.

When you’re considering the performance of your property management company, are you taking this into account?  Chances are, if you’re working with a smaller property management operation, you have no clue of the potential discounts you are missing. That’s the difference with JWB—our clients know they have a partner who’s got their back.