We’ve talked to a lot of real estate owner-operators and facilities managers about water leaks. One of the most common misconceptions about water leaks is the cost of water leaks: most people focus on the large leaks that are claimed through their insurance, because they have the highest visibility.
Meanwhile, there are plenty of small water leaks that happen - and cost time and money to fix - but don’t get factored into the overall cost.
Here are a 3 reasons why - and what owner-operators can do to get a better handle on the real cost of water leaks across their portfolios:
Facilities managers tackle lots of tasks as part of their daily work, and many of them don’t get formally recorded. Fixing small leaks is part of their bread and butter, and typically the time and money it costs to make the repairs is factored into workforce capacity and budgets.
Asking facilities managers to record each leak, and the time and money spent fixing them, is certainly an option. But with a global shortage of trained staff, their time might be better spent elsewhere.
One way to start to get real numbers around how often small water leaks occur is to use a smart water leak detection system that focuses on precision detection. Using technology to detect the leaks not only saves time otherwise spent on manual inspections - it also records each water leak event, automatically generating a list for you.
Because repairing small leaks falls into “business as usual”, figuring out the associated costs is tricky. Having a budget line item to assign repair costs to is helpful for people running the numbers, but it’s not how most facilities managers' budgets work.
Water leaks aren't planned - they just happen. So it's very uncommon to have a budget line item dedicated to them. Which means it's hard to track the spend and set a budget. And so the cycle continues...
To start, we suggest cross-referencing a list of leak events with activity and spending patterns to get a sense of what additional costs might be. But you’ll get the best information from facilities managers themselves, if you take the time to go in the field and speak with them.
There are a raft of hidden costs when it comes to water leaks. Increased utility bills from water loss might be expected - but if the leak came from a hot water heater, your energy bill probably took a hit as well. Claiming for significant water leaks may raise both your insurance premium and deductible. Downtime can cost loss of both revenue and reputation - the latter is easier to quantify, but both have an impact on your bottom line.
To get a better handle on hidden costs of water leaks, you need to understand what leaked, and the impact that it had on the building and its occupants. Following a water leak on its journey from its source through to where the damage is done will give you a good sense of where hidden costs might lie.
Getting a more accurate picture of water leak costs starts with understanding when - and where - they occur in your real estate portfolio. That means expanding your water leak detection coverage to add in a precision solution that reliably detects, reports, and records small leaks in an automated way.
Not only will you gain valuable data on the volume and sources of smaller water leaks across your portfolio - you’re likely to also detect leaks that might have otherwise gone unnoticed until they caused significant damage.