Summer is very busy in the maintenance department here at Service Star Realty: repairs are on the rise with the AC system under duress, pool equipment running twice as long, and this can be of concern. How much do you as an investor need to budget on repairs and maintenance of your rental home? This can be one of the biggest unforeseen factors when you purchase an investment property and can make your investment a success as well as a disaster. Yes, it starts with a thorough home inspection when you purchase, but we need to consider that maintenance is a necessary evil in a rental home not only as components of the home will eventually need to be replaced but because there will be a tenant living in it and using those components on a regular basis.
Let me fill you in on industry averages: we used to tell our investors to budget 10% of all rents received for maintenance. That is a good ball park figure but lately at our local NARPM (National Association of Property Managers) Chapter we had a speaker that had a better estimate. The National Association of Home Builder shows a better measure to be 1% of the value of your home per year. This means that if your investment home is worth 200K, you can expect to spend $2000 a year on repairs and maintenance. Now you will have good months, good years, but in the meantime, we must budget for the numbers game to take effect eventually.
Ranges and ovens can last 15 years, dishwashers and microwave ovens 9 years at best. Our experience at Service Star Realty is that a tenant occupied home needs full paint every 3-5 years and new carpet every 5-8 years. Fixtures, 15 years, garage door openers 10-15 years….AC units require regular maintenance and even in the best scenarios they only last 15-20 years. The list goes on from landscaping to roofing, too much to write here.
We take our job very seriously when it comes to keeping an eye on your maintenance costs.
SETTING TENANT EXPECTATIONS
At the start of each tenancy, we provide a 5-page maintenance addendum that details what tenants are responsible to take care of as well as what they should not touch under any circumstance. These detailed instructions are in writing as well as explained in person to the tenant. Surprisingly, this conversation is something tenants like. By being open and honest, there are no misunderstandings which makes tenants more comfortable knowing what they can and can’t do when they live in your property.
WE FIX THINGS FAST (TO PROTECT YOUR BOTTOM LINE)
Fast maintenance is a priority. When a tenant considers renewing their lease they remember how someone responded to their requests. How quickly was the faucet fixed? Was someone there when they needed them? When happy tenants renew a lease, you enjoy consistent rental income, and eliminate turnover costs.
YOU RECEIVE FAVORABLE DISCOUNTS
We’ve built a pool of long-term, trusted vendors who look after our 600+ properties. Because we supply regular maintenance work, we get favorable discounted vendor rates that are lower than those available to landlords self-managing a single, or small number of properties. You get the benefit of this pricing.
REDUCING CALL-OUT CHARGES WITH AN IN-HOUSE SPECIALIST
Included in your property management fee is tenant access to our in-house maintenance specialist. This is an invaluable money-saver for investors as many times he can troubleshoot and even fix problems over the phone, saving you unnecessary call-out charges.
WE ARE KEEPING AN EYE ON YOUR EXPENSES!
Preparation is key in handling maintenance. Surprises are uncomfortable. Appropriate expectations and proper budgeting will help. We will continue to do our best to keep your maintenance expenses to a minimum.
