No matter how much you try to avoid it, house maintenance and repairs are unavoidable expenses. We get it: these costs can feel like a big drain on your rental income. But that’s only the case if you don’t know how much you should be spending on them.
Here’s the thing: preventing problems is much more cost-effective than fixing them. Let’s put this another way, investing in a PT to keep you fit and healthy is a smarter move instead of spending stacks on appointments at the physio to fix an injury. Precautionary maintenance also helps keep tenants lives stress-free, which is the secret to long-term tenants.
Imagine no hot water during the winter months, which would quickly aggravate the tenant. On the flip side, owners want the tenants happy not because it would keep them longer, but because they do not want the hassle of fixing things. Any situation that aggravates tenants and bothers an owner quickly becomes emotional
By setting aside a clear budget for preventative maintenance you’ll be able to lower the cost of repairs, safeguard the quality of your property and even allow you to charge a premium for rent, too.
And proactive repairs don’t have to cost you an arm and a leg. Let’s walk you through how much you should budget for repairs as well as 8 cost-effective maintenance measures you can take to lower the costs of maintenance as an investor.
How much should rental property repairs cost?
Even the newest rentals will need some level of regular maintenance to keep the property in top condition.
As an investor, you need to have money set aside to cover both operating expenses (the general upkeep of your rental, including painting, landscaping and pest control) as well as capital expenses (proactive steps to boost your property’s appeal, such as adding new appliances, heating or updating countertops).
As you’d expect, how much you should be spending on maintenance really depends on the size, condition and age of your property. For example, large older homes will need much more upkeep than a brand-new studio apartment.
But nobody wants to be caught out by the final bill. In general terms, regular operating expenses for a house are estimated to cost $2,661 per year, while repairs on an apartment will set you back roughly $1,677 annually.
How to avoid overspending on maintenance
Nobody wants to pour all of their rental returns into repairs and maintenance. With a clear budget, you’ll be able to set aside the right amount of money for maintenance expenses (and avoid getting a nasty surprise when repairs are needed).
Want to avoid overspending on maintenance? Here are some helpful ways to allocate your maintenance budget:
- Using the 50% rule: this is a great method to use if you’re a first-time investor or want an easy-to-calculate formula you can use for every property in your portfolio. Essentially, it means you should only spend up to 50% of your rental income on operating expenses (e.g. if you earn $1,000 in rent, you should only spend up to $500 on maintenance costs).
- Using the 1% rule: another great formula if you’re not a fan of complex calculations is the 1% rule. This means your maintenance costs shouldn’t take up more than 1% of your property’s value per year (e.g. if the value of your rental is $400,000 then your annual maintenance costs should be less than $4,000)
- Using the 5x rule: are you a whizz with the calculator? This is the formula for you. This rule means multiplying your monthly rental income by 1.5 to reveal your annual maintenance budget (e.g. if your monthly rent is $2,000 then your annual maintenance costs will be up to $3,000).
Remember, these are just ballpark figures to help you estimate the costs of maintenance. But they’ll help to keep your repairs budget in check and help you avoid running into cash flow problems, too.
8 cost-effective maintenance strategies for savvy investors
While rental property repair costs might seem like a frustrating expense, it’s actually an investment in your rental property’s long-term viability. That’s where proactive maintenance comes in. Mandy, our Lead Maintenance Manager explains,
Owners understand that cost is inevitable but when money can be saved, it should be. A mouldy ceiling should never go untreated otherwise it leads to repaints, which costs much more.
By making savvy, cost-effective repairs on a regular basis, you’ll avoid the most expensive home repairs and problems down the road. So, let’s walk you through eight practical (low-cost) ways to keep your rental in top condition throughout the life of your investment.
1. Regularly cleaning and improving ventilation in wet rooms
Nobody wants to live in a property filled with harmful mould, especially in wet rooms like bathrooms and laundry. But, there are proactive ways to reduce the chance of mould happening in the first place.
Because here’s the thing: hiring a professional to remove mould costs anywhere from $500 to $2,000+ per room.
Instead, here are a stack of cost-effective maintenance strategies to prevent mould from growing in your property and jeopardising the health of your tenants:
- Install a good exhaust fan in wet room ceilings to remove moisture, which will set you back just $100 or less.
- Ensure bathrooms are professionally cleaned on a regular basis, which should cost you $30 to $60 per hour.
- Thoroughly check for signs of damp, moisture or early signs of mould during your regular property inspections and act swiftly to resolve issues.
By spending a few hundred dollars on regular maintenance in wet areas of your property, you can potentially save yourself thousands of dollars in mould costs in the future.
Looking for more ways to improve your property’s appeal? Check out these budget-friendly renovation tips, including a stack of tips for how to update your bathroom and kitchen, too.
2. Invest in preventative pest control
From bugs to termites, pests can be a major headache for property owners (like you). Not only are pests unsightly, but they can cause serious structural damage to your rental and prove harmful to your tenants.
Let’s put things into perspective: getting a termite infestation sorted is one of the most expensive home repairs. An average-size home can cost up to $3,500 (depending on the scale of the problem). And booking a professional to sort out rodent removal can cost up to $300 per visit.
Instead, you could put that money towards replacing or installing a brand new reverse-cycle air conditioning unit in your property to keep your tenants happy all year round.
Instead, booking a regular pest inspection and treatments can stop pest infestations from happening in the first place (for only a couple hundred dollars).
3. Manage your outdoor areas to keep landscaping maintenance costs low
Whether you’ve got a paved courtyard or a grassy backyard, your rental’s outdoor areas need regular maintenance to look their best. And budgeting for landscaping maintenance as well as roof and gutter maintenance costs is essential.
A well-presented garden gives your rental instant curbside appeal (which is helpful if you’re looking to lease your property). Plus, clean and tidy outdoor areas will prevent mould and weeds from moving into your rental and detracting from the perceived quality of your property.
Wondering how much landscaping maintenance costs? For just $40 to $60 per hour, you can hire a gardener to keep your outdoor areas in top condition for years to come.
Over time, your property’s plants, outdoor structures (like fences and patios) and grass may need to be replaced, too. The good news? Replacing these items can be claimed as immediate tax deductions to potentially lower your next tax bill.
But, you can only be replacing existing plants and structures for this tax concession to apply. If you add new plants or outdoor features, these are seen as improvements to your property (meaning you can only claim their depreciation in value over time).
4. Improve your rental’s security
Keeping your property safe and secure is important for your tenants and your back pocket. Not only can broken gates, loose hinges and poor quality locks lower your rental’s appeal but it can also leave your property vulnerable to break-ins and damage.
But you don’t have to spend thousands of dollars to make your property safer and more secure. Instead, it just takes a couple hundred dollars and a trip to your local hardware store.
Are your property’s locks outdated and hard to use? You can easily book a locksmith to handle the job for you, which will usually set you back anywhere from $30 to $300 to change locks, depending on the type of lock you go for.
And for extra peace of mind, you can even install security cameras outside the entry points to the rental. These usually cost around $100 to $300, and can keep intruders from breaking in and damaging your property.
5. Replace tired flooring for cost-effective durable options
Nobody wants to live in a home with uneven floorboards, stained carpets, broken tiles and visible signs of wear and tear. So, get on the front foot by proactively replacing your rental property’s flooring for more durable, cost-effective options.
New carpets and fresh flooring are what will catch the eye of potential tenants, and even allow you to charge a bit extra for rent, too.
So, what low-cost flooring options should you consider switching to?
- Lay new, durable carpets (such as solution dyed nylon carpet) in bedrooms to add a touch of warmth and comfort (while being super easy to clean for your tenants, too).
- Place neutral tiles in wet areas (like bathrooms, kitchens and laundries) that are heavy duty, easy to clean and add a modern touch to your rental.
- Opt for vinyl flooring in high-traffic areas (such as dining rooms, living rooms and hallways) for a low-maintenance, budget friendly flooring option that won’t fade over time.
6. Update old, cracked bathroom and kitchen tiles
Cracked splashbacks and shower tiles can be a breeding ground for germs, bacteria and mould. Not only will your tenants have a hard time cleaning these areas but these cracks and stains can also reveal the age of your property (making it less attractive than other newer rentals on the market).
But, by booking a professional to retile and refresh these areas of your rental, you can safeguard the quality of your property and boost its appeal for years to come.
The average cost of booking a professional to retile a kitchen costs $42 per m2. Roughly speaking, to retile a standard kitchen you’d expect to pay roughly $550 (but this will vary depending on the size and layout of your property).
By spending a few hundred dollars upfront on rental property repair costs, you can potentially increase your property’s rental price and even secure good, long-term tenants that will take care of your property as if it was their own.
7. Upgrade outdated window coverings
Window coverings are a tell-tale sign of your rental property’s age and condition. Mouldy curtains or faded blinds can indicate that the property hasn’t been well maintained and may deter potential tenants from applying for your rental.
Instead, it’s worth refreshing your window coverings once signs of wear and tear are visible. This simple, cost-effective step can help you reduce the chance of vacancy when leasing and boost the appeal and perceived value of your property.
The price tag of this proactive maintenance depends on the size of your property and the kind of window coverings you choose. In general terms, curtains typically cost $70 to $200 to install while blinds will set you back around $80 to $250 per window.
Plus, you’ll need to factor in the costs of the actual materials, too. For example, blockout roller blinds are typically priced at $60 to $70 while curtains range anywhere from $10 all the way up to $1,000 (depending on the fabric you select).
Regardless of which covering you land on, you’ll be able to claim these maintenance costs as an immediate tax deduction to potentially lower your next tax bill.
8. Replace your property’s fencing
Broken, tired fencing is a clear sign that a property hasn’t been well-maintained. Not only does this reduce the security of your property but also lowers its appeal to potential tenants (which can heighten the chance of lost rental returns and long periods of vacancy).
Instead, proactive replacing and repairing fencing can keep your property in top condition for years to come.
In many cases, repairing your existing fence is the best way to keep costs down and boost the security of your property. Repairing part of your existing fencing will set you back anywhere from $750 to $1,500, depending on the material used and the size of the job.
So, let’s recap what we’ve covered about maintenance and repairs costs. First up, how much you spend really depends on the type of property you own (as well as its age, condition, and size).
And the best way to keep costs down is to make savvy, proactive repairs on a regular basis (so you can avoid small problems becoming big issues).
From installing good exhaust fans to booking regular pest inspections, you can keep your rental in top condition and avoid the hassle of costly repairs down the line.
When it comes to lowering the cost of maintenance, taking proactive steps is what will save you from big, costly issues cropping up down the road. With regular, cost-effective preventative maintenance you’ll be able to safeguard the quality and security of your rental, retain great tenants and avoid the hassle of big costly repairs in the future.
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