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Every tenant wants to live in a well-maintained property. But that’s not the only reason why investors (like you) should prioritise proactive maintenance and repairs.
So, we’ve pulled together five key reasons why investment property maintenance needs to be top of your agenda and how it can help you boost the value of your investment property.
By staying one step ahead and investing in value-driven maintenance, you can secure top-quality tenants and keep them around for the long term. Plus, proactive maintenance can potentially lower your tax obligations and even allow you to charge a premium for rent.
Why should landlords maintain their rental property?
A well-maintenance investment property doesn't just keep your tenants happy. In fact, proactive maintenance is what will help your property retain its value over tenancies to come.
But the reality is that maintenance is one of the top three pain points for landlords, and can feel like an ongoing expense and burden. In fact, 25% of property owners we surveyed mentioned property management and maintenance as one of their three biggest challenges.
So, cover off five tangible reasons why you should keep your investment property well-maintained and how preventive repairs can boost your rental income, too.
1. It lowers the cost of repairs over the long term
Repairs and maintenance are unavoidable, but how much you need to spend isn’t set in stone. Instead, you can lower your final bill by keeping your property in good condition with regular repairs.
Plus, the sooner you catch maintenance problems, the easier (and cheaper) it is to get them sorted.
By scheduling regular routine inspections, you (or your property manager) will be able to spot any potential issues before they become major, expensive maintenance problems.
That means having a clear inspection checklist and knowing exactly what to look for during every visit (from leaky taps to moisture build-up all the way to early signs of structural damage).
In practical terms, here’s what you stand to save by catching issues early:
- By addressing moisture build-up in bathrooms and installing a new exhaust fan ($100) you can prevent mould from moving into your rental (which can cost thousands to fix).
- By spotting leaky taps during a routine inspection, you can book a plumber to fix the problem early (for as little as $60) and save yourself the high cost of an emergency tap repair (which can cost up to $200 per hour).
- By organising a routine annual pest inspection ($250) you can catch pest problems before they happen and save yourself thousands in investment property maintenance costs (with termite removal costing up to $3,500 depending on the size of your rental).
Catching maintenance issues early can drastically reduce how much you spend on repairs year to year. It’s all about getting on the front foot and being proactive to lower your maintenance expenses over the long term.
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2. It lowers your investment property’s chance of vacancy
Being a savvy investor means understanding what tenants want from a rental property. Ultimately, the best tenants are on the hunt for clean, well-maintained rentals that don’t show visible signs of significant wear and tear.
But it’s not just during the leasing process that a well-maintained property matters. A practical way to encourage your existing tenants to renew their lease is to respond to their repairs requests efficiently and keep the property in good condition.
By spending a bit extra on preventative maintenance, you’ll boost your chances of lease renewals and avoid the biggest drain on your rental income: vacancy.
Let’s crunch the numbers.
By tackling a few cost-effective maintenance jobs throughout the year (such as updating old window coverings, improving bathroom ventilation and repairing broken fencing), you’ll likely spend around $1,677 annually (for apartments) and $2,661 annually (for houses).
On the flip side, if you choose to avoid regular maintenance and your tenants move on when their lease is up, you could lose hundreds (if not thousands) in lost rental income.
Take this example: let’s say you charge $750 per week in rent for your 2-bedroom apartment. If your rental is vacant for 4 weeks between tenants, you’ve lost upwards of $3,000.
Plus, any repairs needed during that time will also have to come out of your own back pocket.
Moral of the story? Investing in regular maintenance will lower your expenses in the long run.
Setting a competitive rental rate is what will help you secure and keep good tenants. But, if your investment property has desirable features that your tenants are willing to pay extra for, you'll even be able to charge a bit extra than your competitors.
As Wayde Hildrew, :Different’s National Growth Manager explains,
Maintenance is closely linked with leasing. A well-maintained property actually lets owners negotiate for a higher rent, and what’s more, tenants are willing to pay that kind of rent. Who doesn’t love a clean and well-maintained home?
- Refresh wet rooms (like bathrooms and kitchens) with updated taps, fresh tiles and new shower curtains to instantly modernise your rental property.
- Give your property a full interior repaint between tenants (opting for neutral shade such as white or beige). A fresh coat of paint can help you charge an extra $10 per week in rent.
- Update window coverings and swap bleached, tired curtains for new cost-effective options (such as roller blinds or block-out shades).
- Replace old, worn flooring for the kind of flooring tenants preference, such as premium hardwood floors.
By keeping your property in top condition, you’ll attract the best tenants to your rental and be in the best position to charge more for a better quality rental property.
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4. Certain maintenance expenses can help to lower your tax obligations
While you can’t claim rental property renovations as tax deductions, you can claim certain repairs and maintenance expenses to potentially lower your next tax bill.
Essentially, repairs (such as replacing items that have been worn out or broken by your tenants) and maintenance (such as preventing or fixing tenant wear and tear) can be lodged as investment property maintenance tax deductions at your next tax return.
So, what kind of maintenance expenses can you claim at tax time?
- Refreshing your property with a new lick of paint is not only a budget-friendly improvement that improves the appeal of your rental, but can also be claimed at tax time.
- Upgrading window covers (such as curtains and blinds) as well as fly screens and window locks can be claimed as immediate deductions if the expense is under $300.
- Improving or repairing your property’s fencing will boost the security of your rental and can also be claimed as a tax-deductible expense, too.
5. It increases the long-term value of your property
There's a good reason why a whopping $36.261 billion was spent on home renovations in 2019: it boosts the value of the property for years to come.
That’s right, even a kitchen renovation (that will set you back around $10,000) can increase the value of your rental property by as much as $50,000 to $60,000 at sale time.
As Wayde explains,
Maintaining your property keeps your home in good health, financially speaking. If you keep the plumbing, HVAC, floors, appliances, structure, roof and many other things in good condition, the overall value of your property increases as time goes by.
However, Wayde also highlights there’s an important difference between a well-maintained property and major renovations, as he explains,
Keeping your kitchen space well maintained is not the same as renovating the kitchen entirely.
By focusing on value-adding maintenance and repairs (such as replacing tired flooring, upgrading taps and fixtures and improving your property’s security) you can boost the appeal of your rental (without overspending on renovations).
When it comes time to sell your investment property, these savvy updates and improvements can help you attract a higher sales price and can even help you score a capital gain, too.
Keeping your rental property in good condition is what will help you secure great tenants (and keep them around for the long term) to reduce your chance of vacancy. Plus, you’ll also be able to potentially boost your rental income by charging a premium for a well-maintenance property. And the benefits of keeping your rental in top nick extra throughout the life of your investment, and can even help you score a higher return when it comes time to sell.
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Disclaimer: The views, information, or opinions expressed in this blog post are for general information purposes only and should not be relied upon. We have not taken into account specific situations, facts or circumstances, and no part of this blog post constitutes personal financial, legal, or tax advice to you. You should seek tax advice from your accountant, specific to your situation.