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Preventative maintenance saves money.

We've all heard it before ... "If you take care of something it will forever." Change the oil in your car and your engine will keep purring. Replace the filter in your air conditioner and it will keep you cool for years. Eat right, stay fit and live longer.

Well it's no different for buildings. Very often though, it's "out of site out of mind." Who goes in the boiler room or on the roof or into the elevator bulkhead? Do the tenants or shareholders gush over their new parapet walls or do they comment on the lobby carpet? What is most obvious to tenants gets the most attention.

Maintenance ia a tough sell in the face of the "if it ain't broke don't fix it philosophy. But in this economic crunch time we're all going through, saving money has become the rallying cry. So how can you justify spending money that the shareholders, tenants and other fiscal managers can't see?

We'll start with dollars and cents. If cost about 10 times as much to replace brick as pointing it. A boiler replacement is a major capital expenditure while a maintenance contract can be handled through the operating budget. Scraping and pointing steel fire escapes can be done with your in-house staff, while repairs to structural members requires certified welders, a significant difference in labor costs.

Preventative maintenance helps you head off problems before they occur and get more milage out of your building systems.

Part of the solution is planning. One-year, three-year or five-year projections can assist the organization with anticipating financial needs well in advance. It saves money too, because with crisis management and rush decisions, invariably more money is spent. The plan can work, if implemented properly and you will find you need to spend less time worrying about the building. This allows you to spend that additional time on other projects, another cost savings from proper maintenance.

Politically, if tenant/shareholders or investors know what will be expected of their pocketbooks, they can make arrangements before hand. It makes all parties concerned more comfortable to know their assets are being run in an organized, thoughtful fashion. We, as industry professionals, get paid to handle these concerns for our clients. It can only make us look good to be on top of the situation.

The easiest and cheapest way to start the process is by working with your current professionals. Your accountant can help ascertain your current financial needs. Your managing agent, working with specialty contractors, can help monitor when repairs will be required and how much they will cost. Your building superintendent can effect minor repairs and forestall major work down the road. The manufacturer of the equipment in your building ia a wealth of information concerning making their equipment last. The blueprint for sayings is there, you must be willing to read it

After utilizing the sources already available, circumstances might require hiring an engineer or architect to outline a plan of attack. With budget numbers in hand and a prioritized order of you can systematically solve your problems. Since some problems like water leaks are related to other problems, like apartment plaster damage, the order with which you solve the repairs can prevent your organization from wasting money. Another benefit of a report is it can help you show the courts your good intent to execute repairs for any pending lawsuits. It may also help secure financing from your lending sources.

If all of this sounds deceptively simple, it is. But like many other things that are simple, it still requires discipline. When you are lobbying to overhaul the elevator because it is time for service although it is working fine, you need to explain why it is important to spend those precious dollars. Knowing the downside costs of letting preventive maintenance or minor repairs go, will help you make your case.

Although real property has been a depreciating asset lately, the drop has been more of a cyclical change than structural change in the business. Therefore it is important to maintain. your building on a continuing basis to keep your property solvent and looking good. If you don't you'll be looking at an even bleaker balance sheet next year.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Review and Forecast, Section II; keeping buildings in optimum condition help keep property values up
Author:Zarembo, Gary
Publication:Real Estate Weekly
Date:Jun 24, 1992
Words:705
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