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Utility and Maintenance Costs
After you’ve closed escrow on your property, there are several areas that you’ll have to take into consideration in connection with what utility or maintenance costs should be minimized in order to decrease your overhead costs.
First and foremost, turn off the air conditioning units and perhaps even the water sprinklers to control costs. In connection with water sprinklers or emitters, learn to operate the water timer on your home in terms of the water output. This may take fifteen to twenty minutes to learn, but if you already know how to work the water timer and where the different water stations are in connection with the landscaping layout of your home, then good. I’ve had $200-plus monthly utility bills on several occasions as a result of real estate agents leaving the air conditioning on full blast in one of my homes. This usually occurs because of their preview house showings. So, if at all possible, turn off the air conditioning units. The on/off switch can usually be found on the control panel, which is usually on the exterior of the home. I would even recommend you place a very small padlock to lock the control panel, so no one can open it up to reactivate the air conditioning.
It’s also a good idea not to leave windows slightly open, unless they’re upstairs window, and it’s done for the purpose to add a degree of circulation to the home. This type of irradiation should be sufficient for the house. If you are in a very hot area, such as New Mexico, Arizona, or certain parts of California, then that may be a well-advised idea in terms of providing some type of circulation so the paint does not crack. This could actually be a warranty issue, in that some builders will warn against such possibilities and advise/require to leave the air-conditioning on “vacation mode” so as the paint will not crack. And lastly, in connection with air conditioning units, a $200 monthly bill may not seem enormous, but when an investor has ten to thirty properties moving forward, the cost can be absolutely substantial.
As for landscaping, avoid hiring a landscaper if possible. Since your home will likely be sold within two to three months, the use of a landscaper is fairly inapplicable. However, if it doesn’t sell, do find a landscaper, whether it be through the yellow pages, newspaper, word of mouth, or Craigslist.com. The point is to have the property properly maintained so it shows well. This is particularly a good idea in order to avoid the wrath of an HOA, which are homeowner associations that fine you for overgrown weeds or uncut grass. Having sat on two HOA’s myself, for better or worse, I am intimately familiar with the role of HOA’s and the positive or negative presence they play in the stewardship of a community. In terms of avoiding HOA violations and maintaining a presentable front and backyard, it also shows a degree of decency and respect toward your neighbors. Overgrown weeds and shrubs, and poorly maintained landscaping is really the ire of your neighbors and should be dealt with in a responsible and mature fashion. All of which means hiring a landscaper on a case-by-case basis. If you don’t sell your flip quickly, hire a landscaper for that property to trim and prune as needed.
On a closing note, don’t get trash pickup service, since it’s not usually applicable either. Some municipalities may actually require a trash pickup for reasons that have to do with sanitation, but often times the municipality or the city may let you skip mandatory trash pickup if in fact you can give them proof that the home is empty.
In summary, the latter criteria are just some of the bullet points that you should keep in mind. As a whole, cutting down your maintenance and utility costs will add to the net proceeds of your investment; since if in fact you are an active investor, these costs will add up significantly.