Rental property ownership is not for the faint of heart. Not only do you have to stay on top of the property's financials but also keep it in good repair, sometimes in the middle of the night or in difficult conditions like the aftermath of a serious storm. As if that wasn't enough, since the pandemic started, you've been asked to do all that but with a materials market that has been far less than hospitable.
It all started with the early pandemic temporarily shuttering factories, which caused a hiccup in supply since there were weeks when no products were being made. Fast forward a year and some change, and boats are piling up in harbors -- trying very hard to deliver materials that you may need -- but have no place to go and no one to unload them. Supply chain issues continue to affect landlords and other property owners in too many ways.
Your maintenance budgets may be upside down
One walk through the local home improvement store may leave your wallet waving the white flag, with price increases on all kinds of materials persisting even now. Although the jokes about trading sheets of oriented strand board (OSB) for cars have pretty much ended, the price of sheet goods has not come back down to earth in many parts of the country. Price increases aren't just limited to lumber -- pretty much every common material that goes into a house or apartment is bringing a premium somewhere.
Of course, the hope is that your tenant won't need any repairs, but the reality of structures is that they need regular maintenance to remain in good shape. When you bought that rental, you surely set a budget for yearly repairs, knowing that some years would be more and some would be less but that, on average, you could probably expect a certain amount. After all this time in a pandemic economy, even a few fix-ups at inflated prices may have seriously turned your repair budget on its ear.
You may not be able to get certain items
It's one thing if you can't get the specific replacement stove you intended to put into your rental unit, but it's quite another if you can't get any replacement stove for your rental unit, especially if you have a renter already living there. Common repairs to plumbing, electrical, paint, doors, locks, windows, and pretty much anything else will be touch and go for a while longer.
Due to raw materials shortages and manufacturing delays, especially with products produced overseas where COVID restrictions may be more aggressive, there are often simply not enough of an item produced and in circulation to keep it on the shelves. Even when an actual materials shortage isn't the case, the ship, boat, truck, or train that's filled with the windows in the right size for your rental house may not be able to be unloaded for weeks.
You may have trouble finding cleaning supplies
Your main job isn't cleaning, but it's certainly one of the jobs you do when you're getting a unit ready to be shown and leased. Although hoarding of cleaning products has mostly stopped, chemical manufacturers are still having a hard time keeping the shelves stocked consistently. In some cases, it's not because the chemicals themselves are unavailable but because packaging can't be bought for any amount of money.
Shortages of resin -- which goes into almost everything -- continue to cause serious problems for packaging manufacturers. Plastics of all sorts start as resins, and most things these days are packaged in plastic bottles or wrapped in plastic wrap. Like other materials, the problem may not be that the necessary bottles or resins are unavailable but that they're trapped at sea, waiting their turn in a very long line of cargo boats.
Planning for supply chain issues
You can't possibly anticipate every issue your renters or rentals may have, but you can start collecting bits and pieces that are common repair items for your properties. For example, if you have to replace light bulbs every time a tenant moves out of your apartment building, squirrel a case or two away -- you can always use basics like light bulbs somewhere. And keep extra cleaning supplies on hand, rather than running to the store when you have a unit that needs cleaning.
You may be able to find miscellaneous building materials from liquidators or architectural salvage companies and refurbished appliances from your local appliance repair service. These won't always be appropriate solutions -- especially if you need flooring that's matchy-matchy or a very specific tile to fix a shower wall -- but they offer additional potential purchasing avenues for one-off buys that may be difficult to make right now. Whatever stock the local liquidator has may be limited, but it's already in front of you and doesn't have to come in on a ship that may still be weeks away from being unloaded.
More on Fool.com
Contact Blackbird Realty And Management
For more information on how supply chain issues could affect the rental market, or to speak with us about the property management services that we can offer you, contact us today by clicking here.