Deferred Maintenance Steals Your Profit

Carl Brahe

A lot of real estate investors moved their money into commercial properties in recent years. Commercial properties can be attractive investments that can produce a monthly income if costs are kept low enough to make a profit. Deferred maintenance on your building can result in costs that wipe out your income and maybe more. Choosing to defer the cost of regularly needed repairs and replacement of major items like roofs and HVAC systems may look good in the short term on the books, but the long term costs can be amplified both in terms of tenant appeal and real costs to bring the building up to top condition. When was the last time your building was checked by an independent inspector to evaluate the state of your investment? It may not look as good in person as the numbers may suggest.

Making repairs to high cost components when they are at the end of their expected lives is usually not a good idea. The recurring repairs and collateral damage costs can add up quickly. The video below shows what can happen if you have a small leak in your roof. Besides the visible damage there is hidden damage that can affect the health of the occupants and the integrity of the building. Once a building has had the wall structure soaked it may develop unpleasant odors that will diminish the value and may cause sick building syndrome from mold or other toxic agents. The cost to repair is now added to the cost of a new roof. The cost in occupant work loss and good will are harder to measure.

These IR images reveal hidden water damage. Infrared imagery takes a picture of the surface temperature of most surfaces. When there is moisture in building materials the wet part is a different temperature than the dry part. This is translated to the surface temperature where it may be revealed by IR imagery.

Water leaking into wall

Water leaking through foundation into basement

Plumbing leaking inside wall

 

Roof leaking into walls

Leaking gutter send water into exterior wall

ROOF LEAK

Improper window installation lets water leak into exterior wall.

Wind driven water that penetrates the smallest cavity or gap in mortar or caulking on the exterior of a building can freeze in Colorado. Each time this happens the gap or cavity gets bigger as the freezing water expands. In wooden siding this can result in nails pooping out. When water freezes behind the siding expansion pushes outward on the siding and nails. When the water melts the siding recedes leaving the nail sticking out. The further the nail sticks out probably the longer water has been leaking behind the siding. Small problems with the water shielding properties of your buildings can turn into big problems fast.

 

Wind driven water that penetrates the smallest cavity or gap in mortar or caulking on the exterior of a building can freeze in Colorado. Each time this happens the gap or cavity gets bigger as the freezing water expands. In wooden siding this can result in nails pooping out. When water freezes behind the siding expansion pushes outward on the siding and nails. When the water melts the siding recedes leaving the nail sticking out. The further the nail sticks out probably the longer water has been leaking behind the siding. Small problems with the water shielding properties of your buildings can turn into big problems fast.

Uncontrolled water can do even more damage to the structure in places where there is expansive soil. Expansive soil is clay that swells when wet with such force that it can tear a building apart. Special considerations are taken when pouring a foundation on expansive soil to assure that the expansion and contraction of the ground beneath the building can happen without damage to the building. This is discussed on the video below.

The structural health of your building can depend on proper drainage to avoid damage during the life of the building. Water must drain away from the foundation. This is important with all kinds of soils, but of supreme importance when expansive soils are present. The earth must be properly sloped and drainage from the roof must be moved away from the foundation. Expansive soil also contracts and can cause damage if it gets too dry. The video below talks about that.

HVAC units are often neglected. My experience is that tenants are usually responsible for maintaining HVAC units but they don't know it. It's not uncommon to find HVAC units that have not been serviced for years because of confusion over who is supposed to do it. This leads to shortened life of units. It can also be dangerous to occupants. The image below shows indication of a broken heat exchanger blowing toxic fumes into this office space.

Another unseen danger to your building can come from the electrical system. Below are IR images of electrical panels that are over loaded, some from handyman work or from too many devices connected to the circuit. Overheated breakers can result in fire.

Protect your investment. Get an annual independent inspection.

The owner of this website has made a committment to accessibility and inclusion, please report any problems that you encounter using the contact form on this website. This site uses the WP ADA Compliance Check plugin to enhance accessibility.