Budgeting for your rental property maintenance
It’s good practice to, once a year, review the performance of your investment portfolio in order to keep track of how your investment goes beyond the initial cost of purchase. Part of this complete picture is understanding and planning your ongoing expenses. Forecasting in this way ensures you don’t find yourself under unexpected financial pressure anytime in the future.
So, how much money do you normally need for regular property maintenance? Across our research and experience with property owners, we recommend allowing 8-10% of your annual yield. This amount should cover regular maintenance expenses and some improvements. If you own an apartment though, you’ll have Body Corporate Fees to consider. It’s a good idea to compile all the costs in an annual budget to get a clear budget. You may include; Property Management Fees, utility costs, garden and lawn maintenance, a provision for capital upgrades, rates, insurance, mortgage repayments etc.
The new rental surge
Depending on the age of your property however, the amount of money you need to spend on upkeep can change. While an old property is likely to show the expected wear and tear, new properties can also have a surprising amount of problems. Tenants aren’t expected to deal with the minor annoyances that a homeowner might, so when you purchase a property that has never been rented before there might be an initial surge of repair and maintenance requests. It’s important to accept that living in a property will always reveal unforseen problems, however repairs and maintenance should settle down after a wee while.
Happy tenants are worth the investment
Completing regular maintenance means that your tenants feel secure and looked after in your property. A happy tenant whose concerns and maintenance requests are dealt with seriously and promptly is always better in the long run – they’re likely to look after your property better, pay their rent on time and may even want to extend their lease. Strong relationships between landlord and renters that are based on goodwill always provide the best outcomes, so facilitating these remains a high priority for us.
While it’s easy to roughly budget for maintenance expenses, for advice more specific to your property it’s a good idea to get in touch with your property manager. They can create tailored recommendations for you to ensure you’re forearmed and forewarned about any possible issues that may arise. It’s all part of making renting a positive experience for both you and your tenants.