Five reasons why UAE landlords should invest in annual maintenance contracts

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Five reasons why UAE landlords should invest in annual maintenance contracts

There are many thousands of residential properties on the UAE rental market that are not covered by Annual Maintenance Contracts (AMCs).

Some landlords consider AMCs purely as a business expense, but as Zohaib Azhar, Head of Operations, at leading home maintenance specialist Hitches & Glitches explains, this can prove to be a false economy, in more ways than one.

Here’s five reasons why.

  1. Enhancing the value of an investment property

Let’s start with an obvious benefit. Regular preventative maintenance will enhance the value of a property. If left unattended, A/C problems, water leaks, blocked drains and electrical outages can overtime damage and or stain, flooring, walls, doorframes, sockets, as well as creating mildew and unpleasant odours.

According to international research data, a well-maintained property can be worth up to 20% more than a property that has been poorly maintained and presented. Taking an average three-bed home in New Dubai, valued at say three million dirhams, that could potentially reduce its value by up to AED 600,000.

  1. Maximising rental income & reputation as a ‘responsible’ landlord

Tenants, as with potential buyers, will be more readily prepared to pay the market rate or above, for a home they consider to be in good order. Whatever the asking price, if tenants believe a property has been neglected it can often result in a discounted offer or request for more generous rental payment terms. It may also take longer to find a tenant and every month the property is vacant, landlords are losing the equivalent of over 8% of annual rental value.

And it’s not only money, but this can also affect a landlord’s reputation. Tenants often use social media platforms to share experiences with their friends and followers. Being rated a good landlord will be reflected in the demand for your properties and the rent tenants are willing to pay.

  1. Avoiding trivial complaints and DIY ‘enthusiasts’

If minor but consistent maintenance issues prevail, tenants will get increasingly frustrated and complain at each and every problem they face. This can be very time consuming for landlords or their agents. Even if they don’t complain, if neighbouring residents are affected by leaks and or odours for example, the problem could escalate, with community management involvement.

Worse still, there is the ‘have a go’ DIY enthusiast that believes he or she can fix the problem themselves. This can not only be dangerous, but it can create even bigger issues further down the line which might require significant and more expensive repairs.

  1. Deferring maintenance can lead to expensive repairs in the long run

Regular servicing and preventative maintenance checks can not only avert failure and or breakdown, but it will also extend the lifespan of components and other essential parts. This is particularly true for air conditioning units, electrical wiring and outlets and plumbing.

Although this is probably a little extreme, I think it is worth mentioning. The wiring in neglected A/C units can work loose and become frayed over time, which can in isolated cases cause friction, burnout and even fire. The consequences for that could be devastating for the tenants as well as the landlord.

If landlords cannot provide any regular service history, A/C warranty and property insurance may well become invalid. This could leave landlords picking up the bill for a new A/C unit, the repair costs of any fire damage and compensation to your tenants for the loss or damage to their furniture and personal belongings – notwithstanding any damage to neighbouring properties.

  1. Peace of mind and ROI

Finally, AMCs offer landlords peace of mind. They can rest assured that their properties are being maintained by a trusted partner, proactively and professionally with the added bonus that emergency calls are taken care of within hours, 24/7, 365 days a year, empowering tenants.

This is especially beneficial if landlords live abroad or travel frequently. And for landlords with multiple properties, it is also more cost-efficient to use one maintenance company, providing consistent service quality and online invoicing.

It’s also an efficient way to budget maintenance expenses, with few surprises. This also provides landlords with a permanent record of maintenance carried out on their property, which is useful should they consider selling, in a similar fashion to somebody selling a car with the full service history.

Last but not least, happy tenants are more likely to renew their leases minimising vacancy periods and agency fees – maximising return on investment.

With a standard maintenance contract from H&G starting from just AED 2,500 per annum, is it really worth taking the risk?

About Hitches and Glitches

Hitches & Glitches is a technology-led office and home maintenance business, and its vision statement is to become the ultimate provider of sustainable and technology-driven home maintenance services throughout the UAE. It strives to deliver excellence in home maintenance services with a focus on quality, value and sustainable best practice while being led by innovative technology, which exceeds the expectations of our customers.