Typical operations and maintenance expenses for multi-tenant units include expenses required to keep the property operating smoothly and property.
Notice that these are not what are typically referred as operating expenses. Operating expenses include in addition to operations and maintenance expenses, property management costs, utilities paid by the property, taxes and insurance costs that are not passed to the tenants, as well as reserves and other operating costs. The typical cost items that need to be taken into account under the category of operations and maintenance include:
• Operations and Maintenance Administrative Payroll Costs This is the annual payroll cost for employed maintainance staff that takes care of all maintenance tasks on a daily basis. Usually at least one maintenance staff person is employed, but more maybe needed depending on the size of the property.
• Elevator This is the estimated annual cost for keeping all elevators on the property in working order, including the cost of any required inspections.
• Other Mechanical Equipment This includes the annual cost of maintaining other electromechanical equipment, especially the heating, ventilation and air-conditioning (HVAC) systems on the property.• SecurityThis is the estimated annual security cost, such as a night watchman, alarm system maintenance, etc.
• Routine Repairs and Supplies This includes the annual budget for routine repairs and supplies, including interior painting, which is important for making the property appealing to current and potential tenants, especially in the case of older apartment buildings.
• Exterminating/Lawn and Landscaping/Garbage Removal and Snow Removal These costs will vary depending on the location, open space and use of the property.
• Resident/Tenant Services This include the budget for services for tenants of the property.
• Other Operations and Maintenance Expenses These include other maintenance costs that do not fall in any of the categories mentioned so far