One of the biggest problems for many rental property investors can be failing to plan for maintenance issues in their budgets. While it can certainly be quite tempting to see all income over and above the mortgage payment as profit, this can be dangerous when something breaks and you realize you do not have a budget to cover the cost of repairing it. The simple fact is that regardless of how well maintained your property might be, things can and will break from time to time so the best course of action is to plan ahead and budget for it so you do not struggle later on.
Ideally, the best time to begin thinking about your repair and maintenance budget is before you actually purchase the property. When you are looking at the numbers associated with the potential investment you will need to make in the property, it is essential that you take repairs and maintenance into consideration. Unfortunately, many investors completely forget to allocate funds they will need for repairs of the property and instead only take costs associated with taxes, fees and mortgages payments into consideration.
First, you need to consider those repairs that can be foreseen relatively easy if you are observant. For example, take into consideration the age of the roof. Generally, by studying the condition of the roof you can usually determine when you will need to replace it, more or less. The same is true of the home’s main systems including the air conditioning system. By taking into consideration the natural lifespan of many of these items you can typically predict when you will need to come up with the funds for these replacement costs.
When considering the potential repair and maintenance costs you may run into as you shop for property, it is important to take several factors into consideration. Property type should be one of the first factors you consider because the type of the property can affect repair costs later on. For example, if you purchase a brick property you certainly will not have to worry about painting it in a few years.
The size of the property should also be taken into consideration. Smaller properties are typically easier and less expensive to maintain than larger properties. Larger properties are more expensive to maintain because it simply costs more money for repair and maintenance issues such as replacing the roof, repainting the exterior and exterior, etc.
Surprisingly, the location of the property can also play a role in how much you need to budget for repairs as well. Take into consideration the distance of the property from your location. If the property is located more than 30 miles from where you are located, you are going to spend more money traveling to the property and that can add up quickly.
Finally, consider how you plan to manage the property. If you plan to handle most of the maintenance work on your own, you should consider the amount of time you have available for making repairs and your own skill and experience level. Hiring outside help can ultimately be a very strong option for property owners, it not only saves you time it also frees you of the stress that is often times associated with trying to keep up with everything yourself.
