Guide to Replacing & Upgrading Appliances In Multifamily
Guide to Replacing and Upgrading Appliances for Residential Management Companies
5 MIN. READ
Residential management companies often struggle with reining in spending. When does it make sense to replace an item outright, when is an upgrade warranted and how do you save money on specific categories? Find out in this guide.
Why do appliance upgrades matter?
Tenants can be selective, and rightfully so. They spend a significant amount of money to rent, and it is not just a place to live - it is their home. So, when it comes to choosing housing units, they want to make sure the place has upgraded appliances and other comforts.
Quality appliances are a common request among renters, and residential management companies understand that they must try and provide these options to their tenants.
Things to consider when choosing appliances
Stainless steel appliances have been popular for years. However, recently, matte black appliances are becoming more sought after. For the tenant, these preferences are usually based on aesthetic reasons alone.
On the flip side, residential management companies have to consider not only aesthetics but also performance and efficiency. Fortunately, there is a process to making good appliance purchasing decisions.
Determine which appliances need the most attention and require the highest spending
Appliances have an expected lifespan, so you need to maximize the value of each item that you purchase. Prioritizing repairs and replacements is critical to getting the most for your money. Evaluate appliances on a case by case basis, and look at the following:
- Can your team handle minor repairs? If so, it is often cheaper for your maintenance techs to swap out a circuit board or replace a burner unit.
- Ensure your team is performing regular preventative maintenance on specific units - keeping coils and units free of dust and grime can improve lifespan.
- Do you have warranties remaining on any appliances?
- Are the units Energy Star rated?
- Track ALL maintenance requests for units and determine which units are requiring more attention and money.
When you evaluate these scenarios, you will be able to make educated decisions when spending your money. For example, it may not make sense to keep repairing and throwing money at a dishwasher that is eight years old and has had several maintenance repairs in the last few months.
To help you decide whether to repair or replace, follow the 50% rule. In a nutshell, the rule goes like this:
If the appliance is more than 50% through its life, and if the cost of one repair is more than 50% of the cost of a brand new unit, always replace instead of repair.
Using this rule as a guide will help you make the best decision when determining how to spend money. Fortunately, there are also systems and processes that can help residential management companies make these decisions even easier.
Centralize your purchasing team
Having the right team in charge of purchasing is crucial. Purchasing decisions need to be thought out carefully and strategically to preserve and protect your bottom line. Having a centralized team helps with many things, including:
- Improved vendor relationships: When there is a single point of contact for your vendors and suppliers, it creates consistency and a cleaner, smoother process for all parties. With centralized purchasing, the framework is designed for the long term. Taking the time to cultivate co-beneficial relationships will ensure both sides can reap benefits.
- No rogue spending: Rogue spending occurs when employees make purchases from non-preferred suppliers. Rogue spending hurts your NOI. So, when you centralize your purchasing, you increase visibility into your processes and can eliminate this risk for your company.
- Cost savings: Centralizing your purchasing helps direct spend to certain suppliers, which can lead to deeper discounts. In this model, the idea is to get the best possible pricing with volume discounts based on historic purchases.
These are just a few advantages of centralized purchasing. It allows your team to be flexible and navigate the hectic procurement marketplace with relative ease.
Who does the purchasing for residential management companies?
When upgrading appliances and making other purchases, it is important to identify who will lead the team and get insight into purchasing habits and trends. The typical purchasers are either the lead maintenance tech and or the office manager. This dynamic can create some problems.
For example, if you need to order belts for your clothes dryers, who would know this best? Probably your maintenance tech. But, by force of habit, they may order from the local supplier that they have done business with for years without vetting the price.
On the flip side, an office manager may not have the best information on what items to buy, but they may know a better source to get lower pricing.
This does not have to be an either/or situation with the right system in place.
Property managers have hectic schedules, so tools that can save them time are invaluable. Raiven is perfectly suited for this. It is an online platform that contains a host of products that help residential management companies streamline their operations to save time and money.
Negotiate better pricing with your appliance suppliers
Raiven can help you find all of your appliance-related supplies and equipment. Pricing on the platform has already been strategically negotiated, so you only get the best prices and terms.
Our Marketplace has top national brands like HD Supply, Ferguson and Home Depot, where you can source appliances and all the other parts and pieces you need to repair them. It is a one-stop shop for all your purchasing needs.
Implementing Raiven in your company will help improve your bottom line and optimize your purchasing program. To find out more information, reach out to us today.