Maintenance Shops is the topic of this post as part of our series on top 8 things to inspect before buying apartments. Here is the list:
- Inspect every unit
- Walk all drive and parkways
- Inspect all exteriors
- Inspect all mechanical facilities
- Leasing and business offices
- Common areas
- Maintenance shops
- Pool and pool systems
Maintenance Shops: The maintenance shops are many times overlooked because they are not a high priority for the operations staff and rarely seen by anyone other than the maintenance staff. It is always a good idea to spend time in the shop to see how the organization of parts and tools is in the shop. You should also check to see what ordering system is in place, if there is one, and to see what condition the shop is in. If the shop is in one of the apartment homes, this could create some issues for the residents that live near the shop. It is always better if the shop or shops are located in their own separate sheds away from the building. This will allow work to be completed at all hours of the day, if needed, for emergencies. If the maintenance shop is in a resident unit, our recommendation for owners is to build a separate shop if they purchase a property.
Example during due diligence: I will give you two different examples of maintenance shops. The first example was a property that was inspected from top to bottom, including the maintenance shop. This shop had parts organized by trade, and by the most used items. There was a tracking system as well. As a part was used, it was marked down on the computer to track which unit received the part and the date it was used. Then at the end of the week, new replacement parts were ordered and the shelves restocked. This property tracked all maintenance issues, as a result they were receiving a quarterly refund check for warranties on defective parts. The maintenance manager and the office manager knew at any moment where the budget for parts and tools was at, and as a result this team was always under budget and had the necessary parts on hand.
Example number two was almost the opposite of the first one. This property had three maintenance personnel and any of the three could and did order parts. There was no tracking system in place for the parts or tools. When we went to inspect the shop, we discovered that there were 3 A/C pumps for exchanging Freon. When looking at the ordering records for parts, it was shown that there should have been 5 pumps. It brought up two questions: Why would a property with 125 units need 5 pumps? Also, where are the other two pumps? When we looked into the missing pumps, the missing pumps walked off the property when other maintenance personnel left the company. The remaining three were being used by each of the three maintenance personnel. This was strange because only 2 of the 3 were licensed to work on A/C’s. The maintenance personnel and the office manager did not know how much they were spending on tools and parts each month. This was affecting their bonuses and the company’s bottom line. A very different outcome from the first property.