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Winter Work (Abridged Version Published in CCAA Newsletter 1/02)

By John Smith, Owner of John Smith Property Management

In this month’s article, I want to talk about the necessary "Winter Work" that goes along with investment property ownership and management.

First, let me clear up an urban myth. I had heard from several different sources that if it snowed on your property, and you did nothing about it, and someone slipped, the owner could not be held accountable, as this was an act of god. Being of the ilk that would rather stay under a blanket, sipping hot chocolate while watching CNN Headline News than outside in the cold shoveling, snow-blowing, and salting (Oh my!), I took this as dogma for several years. However, much to my disappointment, I later found out that my comfort was based on a false sense of security and a heightened level of laziness.

It turns out that in a conversation with my insurance provider, I learned that I could well be held accountable whether the snow had been the work of a divine being or not. In fact, as our conversation continued, he pointed out that as my insurer, he would be remiss if he happened past my unshoveled property and didn't call me and ask me to clear the path. Consider the myth debunked. It's time to pay the neighbor's kid to get to work!

Next, let me talk specifically to you poor landlords who pay for your tenants' utilities. I feel your pain. Perhaps you can relate to my experience of visiting one of my buildings to show it to prospective tenants on a bitter January afternoon. I walked into a very warm house. One might describe it as an uncomfortably warm house. I quickly discovered that the reason the house was so warm was that the thermostat, my thermostat, connected to my furnace, fueled by the gas in my name was set to eighty degrees Fahrenheit. Eighty, when my house was set to sixty-eight to save money! I was in awe.

I walked up to the second floor and discovered that I was not the only one who thought this was too high a temperature. The tenants on the second floor felt it was too hot, so they had opened the windows. For a moment I looked and imagined my dollar bills leaping out of those open windows like little lemmings plummeting to their death on the cold ground below. This had to stop.

In light of the ridiculously high gas prices we've been forced to pay, there are some precautions that you may like to take. If your units have storm windows, make certain that you provide your tenants with them. If you have any window air-conditioning units in the building, you may well want to cover them with plastic to insulate, or, better yet, remove those units for the cold months.

Another possibility is to offer an incentive to your tenants to keep the bills down. Outline how much utilities should realistically cost each month with your tenants, and offer to send them a check for each month that the utility bill comes in under budget. Get them thinking about conservation as much as you do.

Of course, one of the best ways to make certain that you don't get hit with a big utility bill is to pass that cost on in your future leases. You can set up your lease so that you charge each tenant a percentage of the utility bill based on the square footage of their apartment, while you pay the portion for the square footage in the common areas such as hallways and laundry areas.

Whether you pay utilities or not, send all of your tenants a reminder each Fall that the heat must never be set below fifty-five degrees. While this sounds like common knowledge, a great many people have never considered the prospect of frozen water pipes.

For both safety and to keep your bills down, have your furnaces inspected and cleaned yearly to make certain that they are working well and safely. Be sure to keep a clean filter on them. It cost me less to have every furnace in an eight unit building cleaned and checked than it did to have a weekend call to the heating repair company because a furnace wasn’t working while I was out of town. (Of course, these things only break down at inopportune moments.) Lesson learned. On that note, if one of your furnaces turns out to be on its last leg, you might consider replacing it on your timetable instead of its timetable. As far as labor, these replacements are much less expensive when they are preemptively scheduled for a Tuesday morning in October than when they are needed in the middle of the weekend in December.

I hope these ideas can save you some money.

Good luck, and happy renting.

John Smith has a Master's Degree in Education, is a real estate investment and management consultant and trainer throughout the state of Illinois, and has been a real estate investor and manager for over seven years in Champaign-Urbana. To contact John Smith, email him at or call (518) 851-7820.