We are going to continue conversations today around maintenance because maintenance is a very big part of what we do. If you were to, if I was to ask you what how much time maintenance takes up in a property manager's day. Do you reckon it's 50 50 or what do you reckon? The way I put it is because it's changed so much over the past few years. I used to look at the PM role as mostly 50 50 of tenants and owners. That's who you're spending your time on. But now handling maintenance, dealing with contractors, finding contractors, and chasing them up, I would say it's actually a pretty equal split of a third for each person for, so you're spending a third of your time on maintenance, a third of your time. On tenancy relations and a third on owner relations. Yeah. The maintenance is a big issue at the moment, I'm finding purely because of in wa specifically contractors. And they're so expensive and it's so hard to find someone reliable. Yeah. As soon as you find someone good, they move on and change industries. All of our cleaners in the last five years pretty much realized they could make more money working. FIFO in the mines doing the same job of cleaning. So every time you find someone good, you spend. Time and effort to build that relationship and that rapport. And then move on and change into something else. So yeah, it's quite difficult. Yeah. The to and to give you some examples of changes in pricing over the years you've had, I remember probably only about five years ago having a quote for a new vanity, and it was about$750 a quote. Then a couple of years ago, I got a quote for vanity, and it was f. 1500, actually, no, sorry. It was 1500 about five years ago. And then a couple of years ago when I went to go get a quote, it was 3000. And then just recently we've had a vanity that had some water damage and the quote came in at four and a half. Wow. So a really big jump in prices and it does make you wonder have parts gone up or is it the labor that's gone up, or is it. People's behavior and they just don't really wanna work unless it's worth their while. I think it's a bit of everything. Yeah. Oh, yeah. Yeah. A big, but mainly the third. Yeah. There's definitely a few contractors that we've dealt with that you can tell that they just put the prices up with areas that they don't wanna do. Yeah. With jobs that just seem too hard. So they, if they're gonna do it, they're gonna make it. Really worth their time. Yeah. So much to unpack with maintenance. The first thing I do wanna say is that it is not a property manager's job to necessarily find you the cheapest quote. That is not the job and we are not gonna go and spend hours and hours to get the. Best price possible for you. We are going to use our good, trusted, reasonably priced contractors that we've got on our books, and most property managers should have three, at least three, three to five where possible, where contractors for each industry, so three plumbers, three electricians, three handymen, et cetera. That would, that to me is like good business practice. Would that be fair to say? Yeah, absolutely. You need people for different situations. Yeah. So we have this. Conversation a lot. Yeah. Especially with our team. Your smaller companies are great. Like we have a lot of contractors that the team have used for, more than 10 years, but we've found a lot recently, they're not the ones that we can call on the weekend for emergency maintenance. And again, if we do, they're hiking those prices up. So yeah, it really does matter. And I guess that's probably another question that owners should be asking when they are looking at property managers. Is how many contractors do you have on your books and how are your relationships with them? Do you treat them as a priority? Yeah, so I get I, one of our pet hates in the industry is when investors suggest that we are getting kickbacks, oh my God. From contractors in certain eye roll, because it is absolutely not. It's not even heard of, to be honest, like kickbacks from like plumbers and all of that. Like we don't get bonuses from them. We would be very, lucky to maybe get a little thank you bottle of wine at the end of the year. Yes, we do get the bottle of wine, or a box of chocolates or something like that, but it's, it's a really interesting topic because a lot of people say will question why a property manager wants to use a contractor, and they think that because that property manager is saying we need to use this contractor, that there's some ultimatum behind it and there's some benefit. I would actually argue that the property manager, that you should use the property manager's contractor because if there is a problem. Their property manager's got a really good relationship with them. They're more likely to be able to get them to go back to fix something up to get little favors when they need to. Maybe while they're there's something little, like a little tiny thing they could sort out. Yeah, they would do that for you because the contractor wants to maintain a good relationship with the property manager'cause they want us to keep on giving them work. So when owners think that the people we use are expensive. That's what I say to them. No, they're actually in a way not, I don't wanna say they're cheaper. They're actually very reasonable because they have to be accountable to us. Otherwise, we literally pull all the work. And I think when I was looking at last year, some of our contractors, like some of our contractors, we are paying them$200,000 a year. Like in in workload. If you piss us off, you lose that. Yeah. It's so important with those relationships. I really liked the analogy that one of our contractors used last week at the trade education day of frequent flyer miles. Yeah, so this was really interesting. It was one of our cleaners that we had speak and he explained for a contractor, he's if you use us more, you're getting those frequent flyer miles. If you have higher miles, you get more baggage. So that means if they are at a property and we do need them to tighten a couple of screws that's outside of their scope of work as cleaners or, we need them to pull a couple of the weeds in the garden, but. It's not a whole job. So can you wipe that part off the invoice? Yeah. We have those little, we have that existing relationship and we do have, we are allowed to ask those kind of cheeky, but yeah. Necessary questions when we need to and we know that we can actually count on them. So yeah, I thought that was a really good analogy. Yeah, absolutely. And it also means that, if if a cleaning one's a good example.'cause the tenant's sometimes paying for that. And if there's a big argument over it and we have to go to court and we can't pay the bill on time, like yes, it's meant to be an owner's responsibility, but we might have a little bit more pool to say, listen, we are just gonna court. Can you just. Hold off for, a couple of weeks while we finalize this and they're gonna be not on your case. And not in our case as much if we give them lots of work. Again, it's, yeah, it's those brownie points and those those points that you get that are very helpful. So we spoke about, in previous episodes about proactive maintenance and if you didn't listen to that one, then just go back and listen to the podcast prior. But we're gonna talk about the responsibilities of maintenance and. This is gonna be different state by state. So I do just have to disclose that. And we are talking from a wa point of view it's actually really annoying, isn't it, that every state has different legislation because it would be so much easier if it was the same across the board. It's that literally one country. Why we can't just have the same yeah it blows my mind that we don't, so we are gonna talk from a WA point of view. If you would like to hear from a another state's point of view, just feel free to reach out and we will, we'll set that up for you, so that's fine. But the first question is, under the Residential Tendencies Act, landlords have a legal obligation to maintain the property in a reasonable state of repair. How many investors actually know this and what does it mean practically? I wish more of them knew this, or maybe they know it, but they don't quite understand the extent of it. So there's a certain expectation when a tenant moves into the property as per the legislation, that owner is actually going to maintain the property. They can't just leave the leaking tap because they don't have the funds to fix it. They can't leave the leaking roof the full gutters. Like these things have to be actioned because this is their legal responsibility. We sign a lease agreement on their behalf, and it clearly outlines their obligations. And I do think that part of this comes down to the education side when landlords are signing up. So for us, it's a really big focus with our BDM, that we set those clear expectations at the start of what the owner is responsible to maintain. But then on the flip side, we make sure that we're explaining that to the tenants as well. So when they come through a home open, if it's a, an older house and maybe the paint isn't in great condition unless they specify in those special conditions on their application, have the property painted as a condition of their lease, then we make sure that it's really clear to them that they're accepting the property as is. That's not maintenance, that's, that's upkeep of the property. We are talking about actual leaking taps, electrical issues, things like that. The amount of times that we've had owners say oh can't the tenant just do it themselves? Sometimes you'll get a great tenant that is happy to go to Bunnings and buy a new shower head and change it over for you, but that's not actually their responsibility. And we shouldn't be asking them to cover that because it's your property. And you need to make sure that as part of your investment strategy, you're accounting for a maintenance budget. Yeah. And and we get that, like we get that there are things that it would be just so easy for a tenant just to do, but like you said, it comes down to. It's actually legally, they're not obligated to do it. So if they do, it's just a bit of a favor that they're doing. But it shouldn't be seen. It should be seen as a bonus and definitely not as at as an expectation. I I had this. I thought to myself because like with maintenance, a lot of landlords might have the thought of, in my, like personally in my house, I don't actually have a lot of maintenance. And it's like, how did these rental properties have so much maintenance all the time? And my house doesn't. And the analogy I'm gonna say is that I've got this shower at the moment. And it drips and so I just tighten it and I have to go in every night'cause I can hear it dripping and I go in and just tighten a little bit more, which I've now learned I probably shouldn't do that, shouldn't be doing that. But that's what I do as a homeowner.'cause I don't want the plumber to come out and charge me, 500 bucks to change the shower head. I just keep on tightening it. But if I was a tenant, would I report that? Yeah, I would report that because,'cause I can. And that is seen as a benefit of renting these days if people are looking at the pros and cons of renting versus purchasing their own property to live in. One of the benefits as a renter is you're not responsible for things like maintenance and council rates, so that does actually factor into people. People's decisions these days. Yeah. When they are choosing to continue renting. Yeah, absolutely. Another one that comes up with maintenance is grouting. And I have this conversation with variety from the grout guy all the time.'cause I'm like, why don't rental properties always need to have showers rerouted. I've never rerouted a shower in my own home, ever in my life. And she had a really great answer to that, and that was that tenants are responsible to, scrub and clean at routine inspections. So every three months, maybe more often, but every three months, they're scrubbing that shower with bleach, which is actually. Eroding all that grout. When a vacate clean happens again, that might be every couple of years there's another very heavy duty clean and that's wearing away all the sealant and all of that. And so that makes total sense as well. I never thought of that. No, I know. And you can't ask a tenant to only use environmentally friendly vinegar on a shower. Like you can educate, but you can't actually tell them that. Yeah. And there's also how are we gonna then prove and prove, yeah. That's another thing is that we get this quite often when maintenance is reported, the owners say how has the tenant broken it? It'll be like a gate latch on the side. And I think owners need to shift their perspective of this like lame game almost. With their properties. You need to understand if you're buying a property that isn't brand new, that's going to come with maintenance. Yeah. So if you are asking your property manager every single time there's maintenance, what has the tenant done to cause it? That's not a great approach. You need to be looking at it. The fact that, okay, that makes sense. Actually. This property is 20 years old. I can have a look at the gate and I can see it is pretty old. It's likely that this has just happened because as soon as you start taking that approach, it can actually affect the relationship that you have with that tenant. If you are consistently trying to play this blame game that doesn't make the tenant feel very comfortable in the property, first of all, to renew the lease and continue that relationship, but it also makes them hesitant to report any future maintenance. And that's when you get really big problems that build up over time, like leaks under the sink that damage the vanity and the tenant doesn't feel comfortable reporting. And there's also tenants that don't wanna report'cause they're worried the rink goes up. And we do educate both parties. That rent doesn't go up based on the expenditure. For the year. I don't care how much maintenance you've got on the property, that's nothing to do with your rent return and what what you achieve. I know that you in our office do the annual investor audits and they're a really great opportunity to talk about proactive maintenance, which, we've spoken a bit about and general maintenance. And we find that we, when we do these, we do go through the owner transactions and we see whether they've spent a lower, like little money on maintenance or a lot on maintenance. So do you wanna talk about what you are looking for and what we in our office see as a normal limit when it comes to sending out plumbers, electricians, et cetera? So when I'm going through, I am sharing my screen with the owner as well. So they're looking at exactly what I'm looking at in our system. So the first thing I'm looking for is any red flags or repeat attendances. So if I'm going through and I can see that we've sent out. A plumber three times in this year already, or an electrician three times. To me that's saying, okay, first of all, the property is clearly getting to the point where maybe it might need some renovations in the future because it's, we're having this recurring maintenance, but how are we gonna switch our approach to be proactive? So the next time, and I recommend that we do this and I speak to the property manager, we put a note on file to say, next time we have. A plumbing job that comes through or an electrical job that comes through, we actually make sure that the contractor checks all the other fixtures in the property while they're on site. Some owners can see this as maybe an o like an upsell, and I do get that from some owners previously when plumbers have done this without us asking, they're worried that it's an upsell, but it's not. It's us looking after your investment. We are taking that proactive approach and making sure that we're saving you those future call outs. We're saving the inconvenience to the tenant, and we're also making sure that we're fixing and identifying, any other leaks or any other electrical issues before they become a problem down the track. The the bunny is the the, if you can't see me, upsell of that plumbers and electricians put on their invoices is such an interesting one because it is. Everyone perceives it in a different way, and I think that it shouldn't be perceived as an upsell yet. Some people still get pretty shitty at seeing it on the invoice, but it is just too. While they're there, they're just taking an extra five minutes to check to see if there's anything else that could be of a benefit. I personally used to have that opinion that it is that is an upsell. I didn't like it. And and after I got a couple of complaints by owners, I was like, can you take it off? But my mum actually recently just had an electrician over at her house. And she was a little bit rude, may I add? And I was like, that's my contractor. Can you please be a little bit nicer to them?'cause she didn't like paying a call out. She had an issue with a call out. But interesting enough, when that bill came through, the invoice came through, it had all these suggested, it was an earth. That needed to be done, upgrade switchboard. And there was something else aircon service, I think. And it was in there to say, not urgent, but things that your home could benefit from. So I was, in my head, I was like, oh my God, she's just gonna whinge about this now. And she actually went, I really liked how they did that. I'm not prepared to do the switchboard just yet, but probably the aircon was a good reminder and it just, I just, I guess as an investor. If you get something like that on an invoice, I don't want you to necessarily, go, oh, the agency or the property manager's trying to upsell and, we are all trying to take a piece of your, your bank account. I don't want you to see it like that. I just want you to see why some people would actually see it as a benefit and why we are here trying to manage the risk for your property. And it's only ever. A suggestion. If something was mandatory, we would tell you. So don't jump to a negative thought pattern if you see that from your property manager, just, it's just the mindset of it. This is one of your biggest assets. Why would you not want to be protecting it? Why would you not want to be maintaining it and caring for it to make sure that it, you've got that longevity. Yeah. Is, you've spent so much money on this property and you want it to be. Typically you want it to have good return and have good tenants, so you need to come into it and have that mindset of maintenance is a benefit, like you are contributing in a positive way to your asset. It's not something that is like a burden on you. Yeah. It's like you don't buy a car and just assume that you never have to replace the tires. You know that they're gonna come up. And you don't have a choice and you know that it's gonna need services. Yeah. And as it ages you understand that there's gonna be things that crop up. Yeah. So why are we not understanding that? With houses. Yeah. And everything inside a home, everything depreciates. So it totally makes sense that you are going to need to replace everything if you as a investor, if you don't actually have a copy of a depreciation report, which is a whole nother episode. But there is what we call a cheat sheet. So just reach out for a cheat sheet. And that's actually a table of. Depreciation for each thing, so it tells you, how long the paint work should last for. Garage motors, hot water systems. Do you know what? That would actually be quite a good thing to somehow put to owners when they first sign up. So their expectations, they know how long things last for. Yeah, that's a great idea. I reckon I'll add that to the, that deal is absolutely because that's a real common thing that we find where where. Time goes so fast and the number of phone discussions we've had with clients where we've said where they said, oh, I only painted my house a couple of years ago and you've looked at the records and it was eight years ago. I get it. Time goes fast. Like we are already four months into the year. But that's very common that people just go, oh, I felt like I only replaced my hot water system a year ago. No, it was three. And I feel like that should also be a part of the onboarding process. Going through the property with your, the BDM or the property manager and letting them know at that point, when was the last time it was painted. When was the last time the hot water, like you've had the hot water system replaced? Identifying these things means that the property manager can keep those records and if they have a system like Tapi, it will actually flag when they go to send a record order, Hey, this hot water system is already eight years old. So it just gives you that indication. And then it also makes sure that if there are any warranties. That property manager's aware of them. So it saves you a lot of back and forth. It means that if it is under warranty, they can handle that straight away. You are having to send out a contractor and waste that call out fee just for them to tell you to refer back to the supplier. Yeah, absolutely. And we're very lucky that we do have some really good programs like, Tapi that Marissa mentioned, where you can put in that proactive maintenance and recall those warranties. And to be honest, if you don't, if your property manager doesn't have TP, you can do it in the other software, but you'd have to search for it, wouldn't you? If Yeah, it wouldn't be easy. It wouldn't be easy for the property manager, so don't assume that a property manager can easily find all of that information. And I'm gonna, I'm gonna be really honest here. Every time this maintenance, we are not going to open up your managing authority and look at your property detail record to see what was on. What was on warranty. Like that just doesn't happen. It's unreasonable, I think, isn't it? Yeah, definitely. Yeah. So yeah, have, knowing that's where knowing that software in the backend's really important. And and like I said, Tappy is really good, you can ask questions like maybe you've just replaced the aircons. You can say, oh, can you let me know what system? You've got to record my warranty? Or is there a place that you can make, put a easy record? For you and for previous people. And just see, even just by prompting that question, even if the property manager doesn't have it, at least that you've asked, and then it might even like from a property manager's point of view, go, oh, it's actually a really good question. And then maybe that will prompt'em to do a system in their office. It's it's how you can work collectively for the collective benefit. You know what I mean by asking those questions and don't just assume. That every property manager has a system to check all your approves invoices every time there's new maintenance. Correct? Correct. And that's where the longevity of property managers is super helpful because generally they'll remember, oh yeah, I remember. We actually replaced that last year. But the truth is that if you've got a rotation of property managers every, even, every two years, which is pretty good, they're not gonna, yeah. They're not gonna have that information. Yeah, definitely. So there's a direct link between how maintenance is handled and whether a tenant renews their lease. What does that relationship look like from inside a property management office? Yeah, so sometimes when tenants wanna renew their lease, they will if there is outstanding maintenance, they're going to either use that to negotiate on the rent on the rent review, or they're going to vacate. So that is where you are at risk and that's why, where the proactive maintenance is super helpful and doing the right thing because tenants will wanna stay in a property that they feel appreciated and comfortable in. Looking at the big picture, doing maintenance when it's requested. Not being a pain in the butt when it comes to report, to dealing with it, just doing it. And trusting your property manager says you need to do it, that you just do it is going to definitely be a happy tenant. And therefore, like even if you just even ta look at all the layers, if your tenant signs up for another lease and stays long term, you're gonna be saving money on vacancy periods, letting fees, advertising fees. Final inspections. Another PCRI think in total, from a fee point of view between tenancies, you'll be losing about the equivalent of three weeks rent in fees just by changeover of tenant plus vacancy time. So let's just say that a vacancy properties take a couple of weeks maybe to lease at a minimum for changeover. Then you are looking at five weeks. If the average property is 700 a week times five weeks, that's three and half thousand, is that right? Oh, don't get me to check your math. Three and half thousand. Okay. It's three. It's about three and half thousand minimum. That's on the conservative side that's gonna cost you to change over a tenant because the tenant's deciding to leave because you didn't wanna deal with a$200 ans spray. And when you have a great tenant, you want to hold onto them. Yeah.'cause you're also taking the risk. So say you're not maintaining a property, that great tenant is gonna move on and find somewhere and find a property where they will actually feel looked after and know that the property's well maintained. Yeah. Who's to say that the next tenant that comes in is gonna maintain the property and look after it to the same level that your previous tenant did? Yeah. So when you do have someone good in there, you wanna make sure that they. Feel appreciated, and they feel like they can comfortably report that maintenance and know that it's actually gonna get addressed. Yeah. And then if a tenant does wanna stay and they, but there's maintenance that's outstanding, it's reasonable that they say, listen, we are going to we don't wanna we wanna stay, but we are not prepared to sign another lease until this is dealt with. And if it's mandatory maintenance I tend to agree. I'm happy with that decision. Yeah. Even just negotiating a rent increase. If they are understanding that maybe you're not in the position to spend that money right now, that's okay, but maybe you meet in the middle on increasing the, instead of charging market rate.'cause I can guarantee if. Don't negotiate and that tenant leaves. You go to market, you're gonna end up fixing that maintenance anyways. You're gonna, yeah, you're gonna have to do it for new tenant. Yeah. New tenant moves in. That's the first time they always, yeah. Report all the maintenance.'cause there's not a loyalty there. Yeah. They just do it. The and it works, in both ways because if you've got, like if we are renewing a tenant's lease, if a tenant's in arrears or a tenant has got invoices outstanding, we are not gonna commit to signing them for another fixed term lease because we're enabling that poor behavior. So just like the tenant doesn't wanna enable poor behavior from a landlord. Because they're not doing maintenance. Yeah. It goes both ways. It absolutely goes both ways. And it's not that the property manager is taking sides at all. The tenant, the property manager is looking at the big picture. They can see the big picture that by you doing this or just saying yes to something is going to help. Yeah. The longevity of that good tenant in a property. So don't property managers. They don't take sides. Like I, I don't, I know that people think there's a perception that we do, but we just wanna do the right thing. By law, our job is the middle end. That's right. A hundred percent. We work for the owner, but it's also our responsibility to educate that owner. Yeah. And to make sure they're aware of their legal obligations. Yeah. So when we have conversations and we are telling you, you need to get this fixed, that's not us working for the tenant. That's us working in your best interest to say. This is your legal obligation. You need to address this. Yeah. And to minimize your risk as a landlord if you don't do it. Yeah. Yeah. And look, worst case scenario, those tenants can issue a breach notice. So how's that gonna look if you, yeah. If you continue to delay maintenance or you just straight out deny it, and then the tenant breaches you and they escalate it to court, you're not gonna win. No. Because this is your obligation. So at the end of the day, you're paying us as the professionals. So you want to listen to our professional opinion? Yeah. Oh, that's another hole. That's another, oh, nothing. I guess because I'm if I engage a lawyer, I trust what they're saying.'cause I'm paying them. I'm gonna do exactly what they say. If I hire a business coach, I do whatever they say. I know. My relationship with you. I, hire you as an operations manager. I let you make the decisions.'cause why would I not otherwise, I wouldn't pay for someone to be in that position. I don't. And as an investor, you're paying a property manager, why are you not taking their advice? Like, why bother paying them? Yes, keep on paying them, but but like, why? But I, I don't, under that for me is just such an offensive thing when people don't trust me. Like nothing, nothing will. Nothing annoys me more and nothing's gonna get you a termination notice from me. More is someone who doesn't wanna take my word or trust what I'm saying. At the end of the day, this is what we do all day, every day. We are the experts in this. Yeah. You're paying us to give you a service. Yeah. And offer that advice and those recommendations. Yeah. If you don't wanna take those recommendations, that's okay. You're more than welcome to manage your property yourself. Yeah. And that's when you'll end up with those breach notices. Yeah. Go find someone else that you trust more than me. Yeah. Or trust me. Yeah. Absolutely. And last question, if you could give one piece of advice to an investor about choosing a property manager in relation to the maintenance. Let, actually let's reframe that a little bit. Let's reframe What would be a good question for an investor to ask a property manager around like maintenance when they are looking at, at hiring someone, would it be in regards to the number of contractors or relationships or I'd say it's a bit of everything. Like I would probably phrase it as, can you run me through your process with maintenance? Yeah. Because that would then cover what systems they're using. Do they have their preferred trades? Are they giving you that expectation of three quotes for every job? So going through and just a broad question of what is your maintenance process and procedure? I think that should. That should cover everything. And then it, again, it's setting those expectations from the start so you understand what they're offering. And they can feel comfortable that you understand your obligations as well. Probably as well. I wonder whether asking them what their after hours emergency Yes. Processes in the office. Not because you wanna note what it is, but it would show you if there is a process and if the office has processes, which would be a good one as well. And there's no right or wrong, I don't think in it. Like our office emerge. We've got a system where the emergency comes through to me, but if the person calls directly to the property manager, they'll deal with it. If the property manager's busy, they know that they've got permission to text me and say, Ash, I'm outed a, foot footy and can you deal with this? That's fine. What's probably. Not great is if there is no system and that person, if your tenant does have an emergency and they can't get hold of anyone, that would probably be a problem.'cause there could be more damage to the property. So just knowing that there is a system regardless of the type of system is really where, I think could be important. Yeah, absolutely. Amazing. Thanks for joining me with maintenance. We could talk forever on that topic. If anyone has any questions or anything that they wanna to troubleshoot or for us to discuss, feel free to send a message through this platform. Or you can send through a message through our Instagram SoCo Realty as well, and look forward to seeing you for the next one.