Guides
Property management repair costs: a six-variable audit
Property management repair costs broken into six variables — labor, drive time, materials, vendor cost, repeat visits, vacancy days — and audited per trade.
Property management repair costs are not one number on an invoice but six parts that move independently. Naming them is what makes an audit possible, and the audit is what makes the levers visible.
What to take away
- Repair cost is not one number. It is labor, parts, drive time, repeat visits, and the vacancy days a slow repair adds to a turnover. A company that tracks only the invoice total cannot see which part is growing.
- The audit below uses the company's own last hundred work orders and nothing else. It states no benchmark, because the right cost per order depends on the building stock, the territory, and the local trades.
- The four levers, in the order they usually payfewer repeat visits, less drive time, preventive work on the components that generate emergencies, and a vendor panel with agreed pricing.
- Cutting cost by delaying habitability repairs is not a lever. It is a liability, and the state statute and the local housing code decide when it becomes one.
The cost of a work order, in parts
For each closed work order, decompose the cost into named variables:
| Variable | What it holds | Where it comes from |
|---|
Six Cost Variables Per Work Order
- LTech labor hours on site
- DDrive time to and from unit
- MParts and materials at cost
- XVendor invoices for work done
- L — labor.The paid time of the technician or vendor on the order, taken from the technician time entries.
- D — drive time.Travel to the address and back, taken from the drive log.
- M — materials.Parts and supplies the order consumed, taken from the invoice lines.
- X — outside vendor or contractor cost.What the company pays a third party on that order, taken from the vendor invoice. It is the figure the audit sets against the loaded cost of a hire when the company weighs bringing a trade in-house.
- R — repeat visits.Any second or later trip needed to finish the same order, taken from the work order history.
- Y — vacancy days.The rent a unit loses while it sits empty because the repair is unfinished, taken from the turnover record.
Cost per work order = L + D + M + X + R + Y. Total repair cost for the period is the sum across all orders. The audit is not the total; it is which of the six letters is largest, and for which trade.
Worked example. A no-heat call in January: the technician's hours on site are L, the drive to the address and back is D, the igniter pulled from the truck is M. Nothing on the order goes to an outside trade, so X is zero, and the fix holds, so R is zero. Route the same call to an outside HVAC vendor instead, and the vendor's charge becomes X while the company's truck never moves. A second trip for a part that was not on the truck adds R. If the same failure hit a vacant unit and held the move-in, the days the unit stayed down are Y — the one variable that never shows up on a vendor invoice.
The hundred-order audit
- Export the last hundred closed work orders with their invoices, technician time entries, and drive logs. If the company does not record drive time, the audit's first finding is that it should.
- Fill in the six variables for each order. Where a variable is unknown, estimate it and mark the estimate; the pattern matters more than the precision.
- Sort by trade (plumbing, electrical, HVAC, appliance, general). Sum each variable per trade.
- Count return visits. Any trade where R exceeds a tenth of the trade's total has a diagnosis problem, a parts problem, or a technician problem, and the work orders say which.
- Map the orders. Any cluster of D-heavy orders at the edge of the territory is the location decision being paid for one visit at a time.
- Pull the emergency-class orders. For each, ask whether a task on the building's maintenance plan would have caught it. The maintenance plan method treats every emergency as a preventive task the plan missed.
Build the worksheet before the export: one row per work order, with columns for the order number, the property, the trade, the close date, and the six variables, and a marked note on any cell that is an estimate. Under the rows, one small block per trade totals L, D, M, X, R, and Y and divides each by the number of orders in that trade. That table — trade, orders, total cost, cost per order — is the audit's output and the only thing the levers below need.
The audit takes a day. It should be repeated each quarter, on the newest hundred orders, so that the levers below can be seen working or not.
The Hundred-Order Audit
- Export last hundred closed work orders with invoices and logs
- Fill in six variables per order, mark estimates
- Sort by trade and sum each variable
- Count return visits; flag trades where R exceeds a tenth
- Map D-heavy orders at territory edge
- Pull emergency orders against maintenance plan
The four levers
Repeat visits. A return visit costs the whole order again. The causes, in the order the audit usually finds them: the technician lacked the part and came back; the diagnosis was wrong; the fix was temporary and nobody scheduled the permanent one. Each has a fix. The stocked truck is built from the parts the audit shows that trade consumes most, the diagnosis is written down as a script the technician follows before leaving the property, and the closeout rule opens a new work order for the permanent repair before the temporary one closes.
Four Levers That Move Repair Cost
- Repeat visitsstock top twenty parts, diagnostic script, closeout rule
- Drive timegroup routine orders by building and day
- Preventionput water heaters, drains, heating on seasonal triggers
- Vendor panelagreed rates, response commitment, volume
Drive time. Group routine orders by building and by day. A technician who does four routine orders in one building in one afternoon spends D once. Emergencies cannot be grouped, which is why they cost more and why lever three matters.
Prevention on the emergency generators. The audit's emergency list names the components. Water heaters, drain lines, and heating equipment head most lists. Putting those on a seasonal or interval trigger in the plan converts an emergency (with overtime, vendor call-out, and Y) into a scheduled task (with L and M only).
The vendor panel. A vendor called at random charges the call-out rate. A vendor on a panel with an agreed schedule of rates, a response commitment, and a volume of work charges the panel rate. The repair vendor checklist covers what the panel file has to contain before a vendor gets the work.
What is not a lever
Delaying a repair that affects habitability moves cost from the maintenance ledger to the legal one. The state landlord-tenant statute and the local housing code set what the company must fix and how fast. The statutes carry different names — California Civil Code section 1941.1, New York's Real Property Law section 235-b, and Texas Property Code chapter 92 are three examples — and the housing code is usually the International Property Maintenance Code as the city or county adopted it. How fast is reasonableness rather than a fixed number of days: in California the tenant must give the landlord a reasonable period of time to make the needed repairs before undertaking them, and in New York all repairs must be made within a reasonable time that may vary depending upon the severity of the repairs. A qualified attorney is the source for where the line sits in the company's own jurisdiction.
Skipping safety controls is not a lever either. OSHA's safety and health program guidance expects the employer to identify the hazard in each task; the control of hazardous energy standard, 29 CFR 1910.147, governs anyone servicing equipment that can start up while they work on it. An injured technician costs more than any parts discount saves.
Charging the tenant is a lever only where the lease and the statute allow it and the record proves the tenant caused the damage. Without the move-in record and the work order photographs, the charge is a deposit dispute the company will lose.
Keeping the record that makes the audit possible
None of this works unless every work order carries its time entries, parts, invoices, and photographs. IRS Publication 583, Starting a Business and Keeping Records, is the retention floor for the expense side; the owner's accountant and the licensing board may ask for more. For the closeout standard that produces that record, see repairs and maintenance operations.
What Every Work Order Must Carry
- Time entries
- Parts used
- Vendor invoices
- Photographs
- Closeout record
Common questions
These come up every time the audit is presented to an owner.
What is a normal cost per work order?
Not one that transfers between companies. A company managing older buildings in a scattered territory will carry a higher L, D, and M than one managing new construction in a dense one, and both can be well run. The audit's answer is the company's own cost per work order — the trade's six variables summed and divided by its order count — read against itself, quarter over quarter.
Should the company stop using vendors and hire a second technician?
The audit answers that: compare X for the trades a technician could cover with the loaded cost of the hire, including the truck and the drive time. Licensed trades stay with licensed vendors regardless.
Does preventive maintenance always cost less than repair?
Not always, and the audit is how to tell. A component that never fails does not need an interval task. The emergency list identifies the ones that do.
Can the owner be shown the audit?
The owner should be. An owner who sees R and Y understands why the company stocks trucks and books vendors early. An owner who sees only invoices sees only cost.
