Uh oh, when you bought your property, you didn't factor in some of the most common costs associated with being a landlord. Now what? This is really eating into your budget, so how much of it is essential?
Property maintenance can cost a lot, so you may be wondering whether or not it's worth it. Do you need to budget for property maintenance expenses?
Our answer is a resounding "yes." Read on to learn why, as well as how to start your budget.
Why Does Property Maintenance Matter?
Rental property maintenance is expensive and it will cut into your profit margin. You're a landlord to make money, not spend money, right? How important is maintenance really?
Here's a quick breakdown of the three top reasons you need to budget for maintenance.
Property Value
Property maintenance plays a large role in preserving and increasing property value.
A well-maintained property remains in good condition for longer, making it more attractive to potential buyers or renters. When a property is in good condition, you can rent it for more money.
On the other hand, neglecting maintenance can lead to a decline in property value, which can have a long-term financial impact on you as the landlord. The longer you go between maintenance, the worse the property will get.
Safety
Safety is a big concern for property maintenance, and one many landlords overlook.
Regular inspections and upkeep help identify potential hazards. For example, electrical issues and plumbing leaks can be found and repaired before they become dangerous and pose serious risks to your tenants.
Being proactive can help you ensure that the property remains a safe and secure environment.
Tenant Satisfaction
Property maintenance is crucial for landlord-tenant relationships.
Tenants want to live in nice homes. Happy tenants are more likely to renew their leases, reducing turnover rates and minimizing vacancies.
They're also likely to provide positive recommendations and reviews. This can attract quality tenants in the future.
How Much Should Landlords Save for Property Maintenance?
If saving for property maintenance expenses is so important, how much should a landlord save?
Landlords should aim to budget about one to two percent of the property's value for annual maintenance costs, but the specific amount can vary depending on the size and type of the property, among other things.
It's important to consider routine preventative maintenance, major repairs, and tenant responsibilities when budgeting. Having a financial cushion for unexpected maintenance or repairs can help you prevent unforeseen expenses.
Are You Budgeting for Property Maintenance?
If you haven't made room in your budget for property maintenance, it's time to do so. The last thing you want is for your property to fall into disrepair. By setting aside a small percentage of your income, you can keep your property in good condition long-term.
Are you a landlord in Littleton, Colorado who could use some help with managing property maintenance? PMI Little Town can help. Our experts can help you with maintenance, tenant screening, and so much more.
Schedule a consultation today so we can discuss your property management needs.
