There are costs associated with owning rental property, and it’s a big topic. One of the questions I get a lot when talking to potential clients who are trying to decide whether or not they want to lease their property is: how much will it cost? They are particularly interested in what the maintenance costs will be, and it’s an understandable question. Much of the answer will depend on how old your home is.
For example, if you have a brick-sided 1920’s bungalow, you will have to expect higher maintenance costs than if you own a 2010 vinyl-sided home. Age plays an important role in how much your maintenance and repair costs will be.
In addition to the age of your home, the type of property you have also matters. For example, condos often have their exterior maintenance expenses paid for by the association. Therefore, as a condo owner you will not have to worry about outside paint or putting on a new roof.
Generally, you should plan to spend around 20 percent of your rental income on maintenance. That sounds like a big number and you might worry because you need 100 percent of your rental income to cover your mortgage. I understand that and it’s a concern a lot of landlords have. You have to ask yourself before becoming a landlord whether you are prepared for these types of costs as part of your investment. Maintenance will always be there.
One thing we encourage our property owners to do is to create reserves. That can be difficult, and we understand. However, a reserve account will help you pay for maintenance or cover the cost of vacancies. You could go two or three months without having to spend anything on maintenance issues, and then something big will happen and you’ll need a new roof or a new furnace. These big ticket items will need a healthy reserve so you can pay for those expenses.
We encourage owners to set up an account and peel off some of that income every month to pay for those things.If you conduct routine preventative maintenance, you will have a good shot at keeping your maintenance costs low. Check your HVAC system routinely. We always tell our owners to have the air conditioning unit serviced in the spring and the furnace looked at in the fall. Get a licensed technician who can point out any potential problems that could be an issue down the road. It is much easier to pay for a maintenance service than it is to pay for an emergency service. If your furnace goes down on a Saturday night in the middle of winter and your tenant has no heat, that will be an expensive repair to make and you will have a tenant who is upset. Another maintenance item we suggest is gutter cleanings to help keep water away from your property. A flooded basement is another expensive repair that you do not have to worry about.
You might have a lot of questions about how to plan for maintenance costs as a landlord. Please contact us at T&H Realty if you need more information.
For example, if you have a brick-sided 1920’s bungalow, you will have to expect higher maintenance costs than if you own a 2010 vinyl-sided home. Age plays an important role in how much your maintenance and repair costs will be.
In addition to the age of your home, the type of property you have also matters. For example, condos often have their exterior maintenance expenses paid for by the association. Therefore, as a condo owner you will not have to worry about outside paint or putting on a new roof.
Generally, you should plan to spend around 20 percent of your rental income on maintenance. That sounds like a big number and you might worry because you need 100 percent of your rental income to cover your mortgage. I understand that and it’s a concern a lot of landlords have. You have to ask yourself before becoming a landlord whether you are prepared for these types of costs as part of your investment. Maintenance will always be there.
One thing we encourage our property owners to do is to create reserves. That can be difficult, and we understand. However, a reserve account will help you pay for maintenance or cover the cost of vacancies. You could go two or three months without having to spend anything on maintenance issues, and then something big will happen and you’ll need a new roof or a new furnace. These big ticket items will need a healthy reserve so you can pay for those expenses.
We encourage owners to set up an account and peel off some of that income every month to pay for those things.If you conduct routine preventative maintenance, you will have a good shot at keeping your maintenance costs low. Check your HVAC system routinely. We always tell our owners to have the air conditioning unit serviced in the spring and the furnace looked at in the fall. Get a licensed technician who can point out any potential problems that could be an issue down the road. It is much easier to pay for a maintenance service than it is to pay for an emergency service. If your furnace goes down on a Saturday night in the middle of winter and your tenant has no heat, that will be an expensive repair to make and you will have a tenant who is upset. Another maintenance item we suggest is gutter cleanings to help keep water away from your property. A flooded basement is another expensive repair that you do not have to worry about.
You might have a lot of questions about how to plan for maintenance costs as a landlord. Please contact us at T&H Realty if you need more information.
The post Indianapolis Rental Property Maintenance Costs and Prevention appeared first on Indianapolis Property Management Blog by T&H Realty.