Your Grand Rapids rental property may be in excellent condition. Maybe it’s even brand new. You can still expect that repairs and maintenance will be necessary, however. These variable expenses can be difficult to budget for. You may go several months without having to pay for any kind of maintenance, and then another month will arrive and you’ll find yourself responding to a handful of maintenance calls for a single property.
There are several ways to budget for maintenance at your rental property. One good way to prevent expensive surprise emergency repairs is to pay attention to preventative maintenance. It’s always going to be cheaper than deferred maintenance and unexpected catastrophes.
Property Management Math: How to Budget
You’ll want to have some kind of a maintenance reserve in case you do have a repair that comes up. Whether it’s a $100 garbage disposal fix or a $3,000 roof repair, you want to make sure you’re prepared financially.
Many property management and investment professionals recommend saving 10 percent of your monthly rental income. If you can put that money into a maintenance reserve, it will be available to you when you need to make a repair. You likely won’t need to dip into it every month, so the savings will grow, allowing you to meet the more expensive repairs later on as they arise.
Routine and Preventative Maintenance Saves Money
If you bristle at the idea of paying an HVAC technician to come out to your property once or twice a year to inspect and service your heating and cooling unit, think about what it’s going to cost to replace your furnace. It’s better to adopt a preventative maintenance plan that addresses and protects your most important and most expensive rental property functions. Think about plumbing and roofing and landscaping and pest control. All of these issues can quickly spiral out of control if you’re not checking on them from time to time.
Invest in preventative maintenance, and make responding to routine repairs a priority. Not only does this protect your investment property from further damage and maintenance expenses, it also contributes to better tenant retention.
Avoid Deferred and Unreported Maintenance
It’s nearly impossible to budget and prepare for the repairs you don’t know about.
Make sure your tenants feel empowered to report maintenance issues as soon as they occur. You don’t want to leave a dripping sink for days or weeks because the problem could turn into a larger plumbing disaster. You could find yourself dealing with rot and mold as well as plumbing problems. Discuss your expectations with tenants before they move in so they understand the importance of reporting repair needs right away, even if they’re routine or minor.
Conduct routine inspections so you can be sure your property is in good shape. Your move-in and move-out inspections should be detailed and well-documented. If you notice that there’s deferred maintenance during these walk-throughs, schedule the work immediately. Pay attention to seasonal maintenance such as gutter cleanings.
We can help you set up a preventative maintenance schedule and a reasonable maintenance budget. If you’d like to hear more about this or anything pertaining to Grand Rapids property management, please contact us at Short South Realty Group.