As real estate investors using the BRRRR method, we’ve encountered several water leaks across our rental portfolio over the past few years. Some leaks have been relatively simple to fix, while others have been more complicated, like those hidden behind walls or under a slab. When water leaks occur, they can be costly and frustrating, both for us and for our tenants.
Water leaks in the yard are usually easy to spot. There’s often a patch of grass that’s greener or taller than the rest, or a mysterious puddle where no rain has fallen. When our maintenance team receives a request related to a water leak, I always joke, “Should we even be providing water at all?” But jokes aside, dealing with water leaks can be a stressful part of managing rental properties, especially when you’re trying to keep your operating costs low while following the BRRRR method.
This post sponsored in part by:
Our tenants pay their own utilities, which means that when a leak happens, they may see a spike in their water bill. It wouldn’t be fair to hold them responsible for a cost caused by a maintenance issue on our end, so we’ve developed a simple policy for handling water leak reimbursements. Here’s how it works:
- Tenant Pays Their Bill: When a water leak is detected, we advise tenants to pay their water bill as usual. Even though we’ll be reimbursing them for the overage, it’s important for them to stay current with their utility provider.
- Provide 12 Months of Water Bills: Once the tenant provides a copy of their last 12 months of water bills, we calculate their average monthly water usage. This step is critical to ensuring we reimburse them fairly.
- Calculate the Refund: We take the bills that were unusually high due to the water leak, subtract the average water bill amount, and determine the total refund owed. This ensures that tenants aren’t overpaying due to an issue that wasn’t their fault.
- Credit Toward Future Rent: The refund typically comes in the form of a rent credit. This is convenient for both the tenant and us, as it applies directly to their account without the hassle of issuing separate payments.
Sometimes, water leaks can go unnoticed for months, leading to higher-than-expected refunds. In some cases, we’ve had to credit a few hundred dollars for a single leak. But regardless of the amount, addressing the issue promptly and fairly is essential to maintaining good relationships with our tenants.
As investors following the BRRRR method, effective property management plays a huge role in maximizing cash flow and maintaining the quality of our rentals. And while water leaks may not be fun, handling them well helps ensure long-term success in real estate investing.
If you’re looking for strategies on how to manage your rental properties efficiently while scaling your portfolio, the BRRRR method is a great way to build wealth, one property at a time!
Common FAQs using the BRRRR Investing Strategy:
I use and highly recommend DealCheck.io.
With none of your own money, yes. Partnerships are the best way to grow your portfolio without using your own money. Utilizing creative strategies like Hard Money (via W2 Cap Capital LLC) will allow you to fund the purchase and rehab with only 10% down (sometimes 0% down given the opportunity).
Off market. If you don’t know how to pull an off-market list or the mailers you’re sending aren’t producing the results you want, watch the free video at https://FindYourNextBRRRR.com to see exactly how I’m finding our most profitable properties.