Repairs and maintenance make up a sizable portion of expenses for rental properties. Owners should budget for repairs and maintenance expenses as they can have a significant impact on investment property returns. Properties consist of physical surfaces and mechanical devices, all of which are subject to wear and tear. Rental properties, due to tenant turn-over, have more wear and tear than owner-occupied homes and require periodic repair and maintenance to remain attractive and retain value.
How much should I budget for repairs and maintenance?
One rule of thumb is to allocate $1 per square foot of under-air space over a 10 year period. For example if your property is 1500 square feet under air, then you should budget $1500 per year. One year you may need a new air conditioner, but then other years you may only have minor repairs. If you own a single family home versus a condo you can expect to pay for more repairs and maintenance yourself as all exterior condo maintenance is handled by the condo association (of course you pay for this through your dues).
Why is it important to maintain a rental property?
Efficient management of repairs and maintenance will drive higher rental property returns. Our experience shows that well-maintained properties in good repair are more appealing to prospective tenants and therefore rent quicker and yield higher rental rates. Balancing how much to invest in preventative maintenance, repairs, or replacements is part of the equation. The number of problems and how quickly they were resolved are experiences tenants remember when considering a lease renewal.
In summary, repairs and maintenance are a necessary aspect of owning a rental property. And with any investment, regular attention to maintenance and prompt repairs will contribute to greater returns. Your property manager is a good resource for recommendations on maintenance and repairs.