Ep 032 - How to Be a Smarter Multi-Homeowner

Welcome to Be a Smarter Homeowner Podcast, where you'll discover strategies to save money, save time, and be better organized in managing your largest financial asset and biggest expense, your home. Your hosts, John Bodrozic and Beth Dodson, who are co-founders of HomeZada, have been supporting homeowners for over 20 years. They are here to share with you their tips and suggestions, as well as interviews with industry experts. With the goal of helping you become a smarter homeowner. Now here's your hosts, John and Beth.

Hello everyone. Welcome to another episode of Be a Smarter Homeowner podcast. I am Beth Dodson, one of your hosts, and I'm here with John Bedrosik, also another one of our hosts. We talked briefly about home maintenance and who needs to do it, why it needs to be done, the types of home maintenance we need to do today. We wanna talk about multiple homes and how home maintenance impacts multiple homeowners because it adds another level of complexity to the management of multiple homes. And John, one of the things I wanted to start off with is who do we consider multiple homeowners?

Yeah, probably a few different categories. One, it's people who own multiple homes for rental income. Or perhaps even for fix and flip, they're fixer and flippers, so they own it for a period of time, but predominantly more the ongoing rental income. Then you have the people who own vacation homes, and those people can fall into the subset of it's a permanent vacation home for them and their family, or it's a vacation home/partial rental where they're trying to make a little bit of money on the side as well as use it. There's also caring for Family members' homes, which also usually the most common criteria there is essentially you have adult children that are managing their elderly parents' homes as well. So those are the least 3 categories that I can think of: rental, vacation, and family homes.

Yeah. And then I'd also add in there, like, to your point with people who are Renting homes, some of them are actually investors, and that's all they do. They have a primary home, and then they just rent, rent, rent, rent, rent versus there are some components of homeowners that combine all of the things you just said. They rent some homes; they have a primary home; they have a vacation home. They just take on different income streams through what they've got, but they also use. Their vacation home only as their vacation home or some combination. And then I remember the— there we have a customer that actually was managing their home, their primary home, but they were managing both their parents' and their in-laws' home as elderly parents to stay on top of the details. And that was a surprise for me at first, but then realized how important that was For someone who really needs to stay on top of all the maintenance, especially when you're dealing with your family members who may not be able to climb a ladder anymore to clean out gutters, who may not remember where the air filters are and how to do all that. And so I think that that's really important, and a lot of people don't think about that, especially as we age. Oftentimes our income is also fixed. And so the elderly parents may not have additional income to pay for the task done by somebody else. And so adult children then take on that responsibility, which is extremely helpful to their parents. Yeah. So I see all kinds of different entities of multiple homeowners. Managing that.

Yes, we've seen so much of it with our customer base. You know, there's even some people who have, you know, primary residence in the United States, and they may actually have a residence in Mexico or somewhere else. So you've got sort of even foreign countries. Now granted, that's not a huge use case scenario, but definitely, you know, when— I mean, they say that residential real estate is considered one of the largest financial asset classes in the United States. That basically goes to— there's a huge Huge segment. There's many media outlets that basically talk about rental income as either a full-time business or generating passive income for people where they, you know, have their primary job, but they've got 5 or 6 rental properties and it's just generating income for them. It's a very, very big subsegment of people who have multiple homes.

Yeah. In fact, I know we have some military customers that because the military moves on average every 2 years, which is crazy, and we have many customers who have moved multiple times and they were so sick and tired of dealing with having to recreate an inventory because they kept moving and things were in storage when they were overseas or they were moving from a house to a house to a house to a house and taking that home inventory was a pain in the neck. We also have military Customers who have multiple homes, so they lived in a location for a period of time, and instead of selling the home, they decided to rent it to other military individuals. And so they're managing some of those homes as well as their own. And we talk about maintenance, but I brought up the military because of taking a home inventory. But there was a component of taking a home inventory as it relates to all of our houses. That talks about the equipment, that talks about the structure, that talks about the appliances, et cetera, and the outside, inside, et cetera, which we refer to in HomeSADA as fixed assets. Talk about why that's really important as a good start to understanding maintenance when you have multiple properties.

Absolutely. So when you think about multiple properties, most people have a primary residence where they spend the bulk of their time. So it's the time and distance factor where their other properties, they don't spend nearly as much time, and maybe the distance could be, you know, across town or across the country. So the frequency upon which they physically go visit each one of these multiple homes is significantly less. So as a result of that, it goes back to sort of what I call the human mind can only retain so much information. Knowing what types of equipment is in, you know, your rental property, one that's across town, it's 20-year-old home, these are the, you know, equipment that we have. Maybe you have a home in Florida, you've got different equipment, you've got dehumidifiers, or you have sump pumps because there's sort of flooding water. And so there's different things. Maintenance is oftentimes driven based on those fixed assets of that Which said another way, it's essentially all of the building materials and equipment and appliances that make up the structure of the house. And so taking an inventory of those fixed assets of all of your multiple homes, whether they're rental, vacation, or elderly parents' homes, becomes hugely critical because now you can easily log in with a device and sort of see, oh, I haven't been to my Florida home in 6 months, I've got a sump pump issue. Or do I even have a sump pump there? I forgot. Look it up and kind of, oh yeah, it's XYZ kind of mentality. So inventorying those fixed assets becomes what I call the baseline and the foundation that oftentimes drives a lot of the how often do I need to do this maintenance and/or inspections to make sure these things are working effectively?

Yeah, I mean, I just think that a lot of that, those fixed assets, we're asking people to keep things in their memory again. If they have to memorize what those fixed assets are. And if you have multiple homes in different varying locations, then you can't even remember what's in them. And you may need to be more specific.

Like, you can't even remember what's in your primary home. As soon as you have an extra home, it goes like an exponential curve of like the amount of things that you need to remember. And yeah, it's a huge, huge thing. And a lot of people don't do it.

Now, excuse me. So we take an inventory and then we secure reminders of all these different properties, and now we can manage these properties accordingly. Some people actually have property managers, and those property managers have differing types of roles. Some may be Full service, meaning they, they have got a network of service providers that will come in and, um, provide the actual maintenance activities. And they may or may not tell you, which I don't think is always a good thing, because if ever you need to sell that property, you need to be aware of that, that schedule and what has been done. I go, the other thing that I believe happens too is Some of these property managers do some work on the maintenance aspect, but then not all. And then there's a third category where they literally manage the rental income and they do nothing else. And even if they do manage all of the maintenance, one of the things that I look for is, well, what maintenance did you do? Can you provide me a schedule of what you did so that I can carefully document it myself and manage that schedule in case I ever switch property managers and I need to then take on that responsibility myself or share that information with a new property manager so that they can then take on that responsibility? But one of the things that really impressed upon me is as property managers, if you are doing the work, then I need to know the schedule. If you are not, That's okay. I'll take care of the responsibility of doing it, but then I need to allocate time either prior to showing up to my vacation home that I'm going to have a vacation with a couple days earlier, so it's focused on nothing but maintenance, and then performing those maintenance tasks, then enjoying my vacation, or communicating with the property manager so that they can get everything done accordingly on a schedule that. I like. So any thoughts on what I just discussed, which is a lot?

Absolutely. It goes into what I call, okay, for people who hire a property manager, and they're the ones that are going to do some maintenance, it's really divvying up the tasks.

Correct.

Right. And you need to have clarity, which goes back to you have to have a schedule of what are the maintenance tasks that this home actually needs, because it's probably different than your primary residence. And it's different based on, you know, a different rental property across town. So having the schedule, number one, is hugely important. Then the second part of that is, okay, of the entire schedule, the property manager may only do 20% or 50% or 80%. You as the homeowner or the owner of that second property need to know that, okay, the property manager is only doing these things, I need to do these others. I'll give you like a great example of what's a simple task.

Yeah.

Right? Which is professional cleaning your screens and windows from the outside.

Yes.

Like, why is that so important, right? It's a simple sort of thing. Okay, well, the property manager probably not including that maintenance task in their sort of schedule. They may be changing the air filters, they may be, you know, checking the dryer, whatever. But what happens is dirt and dust build up inside your screens, right? And then if it's, you know, a vacation or a rental property that's, um, you know, it's spring or summertime, people open the screens and now all that dust gets blown into your house.

Yeah, that's important. And then that means your air filters are working extra hard and you got to replace them earlier, and then all that dust is in there, and then you got to vacuum more, and then at the same time it's making people sick. And yeah, I agree. So Staying on top of it.

Most property managers probably don't do that. And then if you're the homeowner and you want to make sure that, you know, A, your occupants are healthy or you're using it as a vacation home, you want to do it and you want to minimize all the other cleaning of the dust and dirt. Then, you know, washing your screens probably at the end of the winter season is an important task. And I could probably, you know, we probably don't have enough time on this podcast to go through it all, but, you know, there's just maintenance tasks that the property manager doesn't include. It's literally sitting down exactly like you said with them saying, okay, these are the things that I want done on my home. Which ones are you going to do? It's included in your service. And which ones am I going to do that I'm just going to do when I, when I arrive at my other home periodically?

Yeah, no, that's— it's important. And I know there's some property invest— property managers that are now investing in full-service home maintenance professionals. And those Maintenance professionals will then take on responsibility of even doing updates to a home over time. And that's for another podcast. But some people are investing in that. But it goes back to your point, you have to have clarity with your property manager. The worst thing you can do is assume, which we know that does, assume that they're doing something and then they don't. Or assume that they just because they did it once means they're going to keep doing it.

You're 100% correct. And it goes back to we we've talked about in a previous podcast all the different kinds of maintenance, right? There's the energy efficiency, there's the safety, there's the health, there's the inspections to spot small problems and fix them before they turn into big problems. I'll give you an example of a safety one. Garage doors have those little tiny sensors on the bottom of them. Yeah. And what do those sensors do when the garage doors are coming down? If an infant child or a pet or something crosses that little beam, then the garage door will go back up.

Correct.

Right. Well, you and I both know that those little beams sometimes get off-kilter. They're not sort of— they're not working. Maybe a rodent has eaten that little low-voltage wiring, right? Is the property manager going to inspect that once a year? Probably going to miss that sort of thing. But you, the homeowner who's renting this house, right? We have insurance and liability issues. You certainly don't want to have any accidents around garage doors and pets and children getting injured by that. So there's the safety component to it. There's just so many things that, you know, again, it goes back to clarity of having all those different maintenance tasks categorized on a calendar so that you and your property manager know about those things.

Yeah, and I think when you are managing multiple homes, we talked about earlier, exponentially your maintenance tasks just go up. That's just reality. And then we talked briefly at a previous podcast about weather. Like, weather seems to be like everything as it relates to a home. Like, it just— you just can't escape it, which is not necessarily a bad thing. But let's talk about weather as it relates to People buy second homes because of the weather. And so you see a lot of Canadians, they come down and they buy homes in the South. Same thing with Northern United States residents. They will buy homes in the South and show up as snowbirds. And you will see people who live in other areas of the country who really love to ski, they'll buy a ski home. Whether it's in Idaho or Tahoe or Washington or Colorado or wherever, they'll buy ski homes. And every, um, property that you have is very different. When you are talking about Florida, you're talking about a lot of humidity in the summers. Are hot. So the people who may have spent their time as a snowbird in the winter and the spring, they may go back to the northern part of the country where they have a whole different weather component. They got to deal with winter in their other home. And then same thing as it relates to skiing. I mean, you could get— I remember years ago, There was an inordinate amount of snow in Tahoe and homeowners couldn't access their homes. And then all of a sudden, certain roofs were caving in.

Wow.

And so how do they get a hold— how they get up there and how do they get access to their properties to remove some of this snow periodically, even investing in a snowblower of some sort? But All these weather patterns change the trajectory of all your different homes. And let's face it, a lot of people are chasing either the sun, or as you said, you know, I used to be chasing 72. And at the same time—

72 degrees.

Correct. And then a lot of people are chasing activities. And so they're like, yeah, I'm gonna go skiing this time of the year, I'm gonna go to the beach this time of the year, I'm gonna live here on the lake this time of the year, so on and so forth. Let's talk about the complexities as it relates to these homes. I mean, we talked briefly about taking a home inventory of the fixed assets to help with that process. I mean, taking a home inventory of the possessions you have in those, those areas may also help because, for instance, in an area with snow, you may need a snowblower.

Correct. Yes, it's, you know, I kind of look at this a number of different ways. The first is for somebody who owns only a primary residence today, and they're going to embark on buying that second home either for rental or vacation, right? That's a big step because oftentimes they end up buying the dream beach house or the dream mountain house and they don't know of all the different climate issues that that new house actually faces, right?

Yeah, same here.

So it becomes sort of the, they didn't realize they needed a snowblower and a snow rake to actually help rake some of the snow off the roofs kind of mentality. Or they didn't realize they had a dehumidifier in the house needed maintenance. So that's why it's so important, I think, to— let's face it, every home is subject to its climate and weather. Mm-hmm. And so knowing that and having some research, and I know that, you know, I'm quite proud of the fact that HomeZada, through our Homeowner AI, tries to help educate people on that by a single click of the button. But that's the educational piece. The second part of it is absolutely you need a maintenance calendar that sends you these reminders that's unique to these homes. Especially because you're not there all the time and you need to be aware of all these things that you need to do because the climate and the timing of the year, let's face it, April in Minnesota could still be snowing versus April in Florida is completely different, what sort of weather. And so knowing those things and having a calendar reminder system, I think, is a huge destressor for people, and it's going to minimize that first-time experience of people buying their second home and then 6 months later going, oh my God, I didn't realize I needed to do all these things and it's costing me more than I thought. That's because they didn't have a plan up front to sort of deal with these kinds of things.

Yeah, and that's important too. Like, if you— you bring up a good point. Like, if you're going to use a vacation home and you're going to rent it out as well and you want to Rent it out to pay for itself and then use your vacation to do some other things. It's important to understand the cost of maintenance as part of that expense-income strategy. And I think not a lot of people always understand that, but tracking that is critical. And that's one of the reasons why I'm also a firm believer I don't rely completely on a property manager to do that. Because I want to understand what are the real costs and am I actually making the money I need to make to keep it a profitable endeavor? Because there's a lot of, especially if you're an investor on properties, you're looking for a specific rate of return. And so you need to take into consideration the maintenance aspect in order to Understand the full investment each year and the full rate of return so that you can make the best decisions. And maybe you look at the, the area that you've purchased rental properties and you say, this isn't panning out anymore. So it may be time to sell those properties, and I'm going to go look at another location that may benefit me more, especially if that is your primary Source of income.

Yeah, no doubt. There's the— 100% agree with you, the financial aspects of the maintenance. And we kind of also oftentimes talk here at our podcast about maintenance kind of falls into 2 buckets. One is there's the preventative costs of just things that you need to do to minimize, you know, things from getting worse and/or just deficiency. And then there is fix-it and repair costs.

Mm-hmm.

But the fix-it and repair costs are oftentimes driven by the age of the home too. Because—

and the care of the home.

Yeah, and care. Now granted, even if you took care of everything, no matter where you live, eventually HVAC units may need to go and/or roofs need to get replaced kind of mentality, or hot waters need to get replaced. They have a useful life. So almost like tracking a, here's my fix-it and repair costs and here's my ongoing just regular maintenance costs. But then tracking that over multiple years, especially if you own it for multiple years, then you can always go back and say, look, is my total cost staying flat or is it kind of going up? And you're using that as a point of, especially for the people with rental properties or maybe even rental/vacation properties, maybe it's time to sell because the maintenance costs are starting to creep up. I know that we also try to tell people, It's almost like trying to create a budgeting system somewhere between 1 to 4% of the purchase price of the house is what you should budget for both the maintenance and repair costs. And the reason why it's 1 to 4% is 1% is if the home is relatively new, 2 to 3 to 4 years old, usually things are still running well and efficiently.

Yeah.

But if the home is 15, 20, 25 years old, and none of these sort of major systems have been replaced, you're going to probably spend 4% on— 4% times the original purchase price of the home on those ongoing maintenance. So having a financial picture of that is a huge component.

Yeah, no, I agree. And I think to your point, we added like more complexity to owning multiple homes with Maintenance, because there's a financial component, an investment component, uh, balance component, you know, insurance, doing all this. Oh yes, doing all this work.

Correct.

So, so it sounds like we've talked about people managing their own personal homes and having to understand all the different nuances where these homes are based on location. We've also talked about people having to manage even Maybe other family members' homes, and for safety reasons, for cost reasons, for what have you. And then, um, the third element is managing the, um, the investment portfolio that you have for your rental income that you have in various locations, whether you partake partially as a vacation and partially as a rental, or so much so on and so forth. But it's really important to understand that maintenance impacts every aspect of whether you can use the house properly on vacation, whether your, your guests can use it when they rent it from you, or the financial impact it has on your home. Is there anything else you can think of besides the fact that we just added complexity to managing multiple homes to anyone who is either considering multiple homes or who already owns multiple homes as it relates to maintenance?

I think it's just a different way of maybe summarizing it in a slightly different way. I think, you know, people who've owned multiple homes, they love it. Don't get it— don't get me wrong. I think it's fantastic because you're either doing it for rental income or lifestyle enjoyment. So the people who can achieve that in their life, more power to them.

Yes.

So we, you know, Welcome that opportunity for people to sort of improve their lives in whatever way they want. I think, but the opportunity there is you have to have a plan or a system for it. You know what I mean? If you don't have a plan or a system for it, it starts to become a stress and a worry and a frustration. And it's just like everything in life. If you don't have a good plan or a system in place to manage it, then it starts to, you know, Quickly turn south. You want to maintain a happy version of you owning multiple homes and having a system in place to track and manage all these things keeps you on track and basically makes it much simpler. And it's the people who embark on going down that path without having any form of system in place to sort of remind them and track all that stuff, then it starts to become, you know, a bigger, you know, problem for them. And we don't want that.

Yeah.

We want every homeowner Especially the ones that have to care for multiple homes, to have a better system to sort of think about and manage all these things. So it's hugely important.

Yeah, no, I agree with you. It sounds like that's a great way to close out this podcast this time. And we hope everyone found value in the information we're providing. If you think anyone else needs to learn more about how to be the best homeowner possible, please feel free to share this with them. We invite you to like our podcast as well. And to learn more about who we are, our company, HomeZada, as well as this podcast, please visit us at homezada.com. That's H-O-M-E-Z-A-D-A. We really, really appreciate you taking the time to listen to what we have to say as it relates to homes, as well as in this particular case, owning multiple homes and maintenance and the impact that it has on those properties. And if there are subjects you want to hear, please let us know as well. And we thank you for this. Have a wonderful day and join us for another Be a Smarter Homeowner podcast. Have a great day.

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