The repair or replace dilemma pertains to many of the components of rental housing from plumbing fixtures to roofs. Whether to repair or replace is a complex economic decision based on estimated remaining life of the component, replacement cost new, previous repair history, life cycle costs, the effect on tenant relations and aesthetic concerns. In this article I will discuss appliances with respect to the repair or replace dilemma.
When receiving a call about a non-functioning appliance the first check to see if the appliance is covered under warranty. Many of the parts of a refrigerator are covered much longer than the initial overall one-year warranty. Next review the history of the unit. Have other repairs been made. The amount and type of previous repairs needs to be considered. Then obtain an estimate of the cost to make the current repair. Cal-Prop's in house maintenance does this at no cost to our owners. Appliance Rescue at 800-277-5426 charges $10 for a service call estimate.
Is the estimate less than or more than 33% of the cost of replacing the part with a new appliance? Cal-Prop uses the 33% rule, but you may choose a different threshold. We use the 33% rule because the advantages of new appliances have become very persuasive. Those advantages include: The cost of new appliances has dropped dramatically in the last ten years, the energy of efficiency of the appliances pays for the cost of the appliances (even if the tenant pays utilities you still reap the benefits: a tenant knows the total cost of a particular unit including utilities not just the rent), aesthetically pleasing appearance, better reliability, minimizing tenant calls and hassles and safer operation (electronic ignition for stoves).
Following are some tips on buying each type of appliance. I strongly suggest not always going with the least expensive available. These appliances have shown in the past to have more problems and the cost of one repair can increase the life cycle cost (cost per year over the life of the product) well beyond the cost of purchasing a slightly better product. I suggest you call Karen at Aztec Appliance at 619-236-0616.
New stoves run from between $300 and $320 tax, delivery and installation. Electronic ignition saves the tenant significantly on their gas bills and is much safer. The tradeoff is more repairs in the future, but overall it is worth that cost.
The new refrigerators are very energy efficient. If you have a refrigerator over fifteen years old the tenant can save as much as $30 per month in electrical by having a new fridge. 16 cubic feet run about $440 tax, delivery and installation and an 18 about $515 to 540.
Older dishwasher are hard to repair and expensive to repair. The new ones are very inexpensive at $268 including tax, delivery and installation.
Only repair a high-end unit in a single family home or condominium and then only if the unit is under five years old. The technology has advanced and the prices have come down and repairs so difficult that replace is the decision 90% of the time.
Cal-Prop has experienced significant defect and reliability problems with General Electric and/or Hotpoint (made by GE) products. We have experienced the same problems repeatedly: Dishwashers that catch on fire, refrigerators where the freezer drain hold constantly plugs, Washing machines where the tub wears out. We suggest avoiding these products. There are a number of good alternatives.
For questions to the Maintenance Man, write Joe Trudeau, Cal-Prop 4406 Bayard St, San Diego, CA 92109 or e-mail firstname.lastname@example.org or call Joe at 858-483-3534 Ext 16.