When managing a rental property, maintaining the home and keeping tenants happy are top priorities. One of the most effective tools a property management company uses to balance these goals is the “repair threshold.” But what exactly is a repair threshold, and why is it so crucial for both landlords and tenants?
What is a Repair Threshold?
A repair threshold is a pre-approved monetary limit set by the property owner within their property management agreement. If a tenant submits a maintenance request and the estimated cost to fix it is under this set amount for example, $500 the property management company has the authorization to dispatch a vendor and complete the repair without needing to track down the landlord for explicit approval.
This system is designed purely for efficiency. It empowers the property manager to address minor issues promptly, saving everyone involved time, money, and unnecessary stress.
The Real Cost of Waiting for Approvals
It is understandable that some landlords want to approve every single repair. After all, it is their property and their money. However, requiring approval for every minor fix often backfires and ends up costing more in the long run.
Consider a scenario where a tenant reports a broken garbage disposal. The property manager sends a plumber to evaluate the issue. The plumber provides a bid, but because the owner opted out of a repair threshold, they cannot do the work immediately. Now, the property manager has to contact the landlord and wait for a response. If the landlord takes two or three days to answer, the plumber has already left the site. Once approved, the landlord will likely have to pay an additional “trip charge” once the plumber returns.
Furthermore, under Texas Property Code ยง 92.052, landlords have a legal duty to make a diligent effort to repair conditions that materially affect the physical health or safety of an ordinary tenant. Delaying basic repairs for five or six days over a small approval can quickly lead to frustrated tenants and potential legal liabilities. A repair threshold prevents these unnecessary delays and ensures minor repairs are handled swiftly.
Adapting to Inflation: Why Thresholds Are Increasing
The economic landscape is always shifting, and property management must adapt to current market realities. Just a few years ago, a standard repair threshold might have been $200. That was usually enough to cover a basic service call and minor parts.
However, with recent inflation, the cost of materials and labor has risen significantly. A $200 threshold simply does not go as far as it used to, leading to a bottleneck where even the most basic repairs require owner approval. Many forward-thinking property management companies have raised their standard repair thresholds to $350 or more. This adjustment reflects the reality of current vendor pricing and ensures the property management machine keeps running smoothly, saving owners from constant interruptions and extra trip charges.