My history on the current property is this:
Owner bought the property in 2008 and used a local, large property management company who charged them by the job for maintenance. There was no onsight staff (only 48 units) and after 1.5 years, they were so far in the red with the property it was unbelievable! Their plumbing expenses for 12 months was $20,000! When I got it in January, 2009, the occupancy was 58% where everyone else was around 89-95.
They wanted me to do all of the maintenance, except HVAC and electricl, which I thought I could do until I was there for one week and discovered the condition it was in.They let me hire someone for 10 hours a week! I had 16 vacants that had not been turned including a building of 6 that was down because of one unit that had been flooded 6 months earlier and left to gather mold.
After using outside contractors, mostly individuals who did this kind of work "on the side" for 2 years, they let me hire someone "as needed." Ending this year out, that has come to $25,000 for labor for just maintenance. The guy I have now makes $15 per hour as an independent contractor and should be making $20 -$25K plus benefits. He is HVAC certified and very good at everything, except carpentry.
I am trying to gather data the owner can understand to justify maintenance labor. I have paid out $25,000 at $15 per hour this year just for maintenance labor, which I think is high for 48 units with 21 turns. I plan to reduce that to a strict budget of $17,160 and I'm trying to justify that much.
The property is 32 years old, was boarded up for a couple of years in the 1990's, some remodeling done in 2003, then pretty much neglected since. I have repaired most of the major issues and I have done some preventive maintenance work, such as putting vapor barrier under buildings. We have consistent plumbing properties on the property where lines are breaking due to high PSI (it's 95-105 with no pressure valve) and we are responsible for all repairs.
By taking the newly budget maintenance salary for 2013 of $17,160 and dividing it by 48, I'm getting $357.50 per unit per year. That's only labor!!! I want to compare this number to others because I think the owner will understand this better than anything else. Compared to others I have talked to, this is still a high number.
I am budgeting with 22 turns and not including water leaks or HVAC replacements because they are unpredictable. They will have to come out of the profits.
What do you think about this, Herb?