How to Use On-Demand Property Maintenance for Real Estate Deals
There are a lot of tools that property managers/owners who are looking to offload a property can use to help close deals—everything from online real estate listings/ads, to specialized real estate management software, to holding open house events to show off a property. But, there’s one tool for closing real estate deals that many in the industry may be overlooking: On-demand property maintenance for real estate.
What do on-demand home services and property maintenance have to do with real estate deals? Moreover, how can you leverage them to close deals and increase profits?
Using On-Demand Property Maintenance to Improve Real Estate Value
One of the most basic uses of property maintenance is to maintain or increase the value of a property for sale. Property managers often use real estate maintenance services to renovate or remodel a residential property to increase its attractiveness and rent income—the same theory applies here.
By making modifications to a residential property prior to putting it on the market, property managers/owners can increase the value of the property. So, when it comes time to close the deal, the property will command a higher price than it could have otherwise.
However, when choosing property maintenance services to increase value for a sale, it’s important to prioritize the smallest, least expensive fixes that will provide the highest return on investment. This is because, unlike with making renovations to increase rent value, there’s less chance to ameliorate the cost of the renovation/remodel over time (a sale is a one-time bit of income, while rent cost increases are recurring).
For example, say you spend $5,000 on renovations for a single-family home. If the home is a rental property, and the renovations led to a $100 increase in rent value, you would be able to make that money back after 50 months (or four years and two months). However, to get a positive ROI on a sale, those renovations would have to increase the home’s value by more than $5,000 immediately (or provide other benefits for closing the deal, which we’ll go into more detail on later).
By focusing on small, easy-to-fix items that have a higher relative impact on final sale value, property managers/owners can improve their ROI from the property they’re selling.
Using Property Maintenance for Real Estate to Attract Higher-Paying Buyers
While using on-demand property maintenance services to increase the value of a home is one way to improve ROI, the base market value of a residential property isn’t always what people are willing to pay for it. As the old saying goes, “A thing is worth whatever people are willing to pay for it.”
In a market where buyers are scarce and multiple properties are available for purchase, it can be hard to attract a buyer who is interested in paying full market value for a property. Current market conditions can have an enormous impact on whether consumers are willing to make the investment. For example, according to information from a U.S. News report on the 2019 housing market, “While higher interest rates are a sign of a good economy – especially compared with historically low unemployment rates – the change has many consumers hesitating about jumping into the housing market.”
This is where having on-demand home services for real estate maintenance can help. Using on-demand property maintenance to clean up a property and make it more presentable can make it stand out from other residences in the market that aren’t as well-maintained. This helps attract more buyers to the property. With more buyers competing to acquire the property, there will be an increase in how much they’re willing to spend.
Having an attractive, well-maintained property that increases bids for a property is one way that on-demand home services can pay for themselves.
Using On-Demand Property Maintenance to Fix Critical Issues Blocking Real Estate Closings
Here’s a story that many homebuyers and sellers might find familiar:
The real estate deal is almost ready to close, the buyer’s eager to finish things and move in, but there’s a problem. The inspection team just finished their assessment of the property and found a major issue that has to be fixed before the property can legally change hands (or else the owner/real estate agent will be in violation of a random local or federal regulation). Whether this issue is with the plumbing, electrical system, or building’s infrastructure doesn’t matter—what matters is that the deal cannot move forward until the problem is dealt with.
On-demand property maintenance services excel at dealing with these emergencies. Normally, finding a contractor for fixing issues identified during a property inspection is a long and slow process where you:
- Research and call several specialists in the area;
- Wait for a specialist with the requisite skills and experience to be available (which can take weeks);
- Wait for the specialist to make their own assessment;
- Wait for the property maintenance company to get the materials necessary;
- Wait for the job to complete (timing may vary depending on the nature of the work and how much needs to be done); and
- Inform the buyer that the property is now free of the issues causing the holdup—assuming they’re still interested.
With luck, the above process can be completed in less than a month. However, any one of the above steps could cause a month-long delay.
On-demand property maintenance services help to minimize the complexity and delays involved in finding a pro to tackle inspection issues. For example, the Homee On Demand property maintenance platform automates the hunt for a qualified pro by sifting through a network of thousands of background-checked pros near you. Each professional in the area is given a chance to look at the job (starting with any pros you have marked as a “favorite” in the network). These on-demand home services pros review the specifics of the job, and may accept or reject it depending on whether they feel they can complete the job based on their qualifications.
This saves property managers and owners hours of time spent on the phone trying to manually qualify real estate maintenance service providers. Once a pro accepts the job, he/she can be at the property in as little as 30 minutes—not days or weeks, but minutes. For most minor issues, on-demand home services can be completed the same day they’re ordered.
Additionally, with Homee On Demand, property managers only pay for the time that their maintenance pros spend on the job—which is tracked down to the minute, not the hour.
The speed of on-demand property maintenance services helps prevent inspection issues from derailing the closing process. This factor alone makes on-demand property maintenance for real estate worthwhile.
Wondering how you can leverage on-demand property maintenance services for your real estate deals (or for your rental properties)? Reach out to the team at HOMEE today!