As any landlord will tell you, maintenance is an on-going necessity in rental properties that can quickly get out of hand, which is why this week I’m looking into how you can try reduce maintenance costs and protect your profits.
Be Careful When Selecting Tenants
Luckily most tenants are respectful and will happily look after your rental property and their home to keep it in good condition. However, there will always be a few inconsiderate tenants who will mindlessly damage your property, or who can end up intentionally trashing it. To protect your property and wallet, ensure you spend a reasonable amount of time carefully selecting and reference checking all applicants before accepting them. Here at Quinovic Kent Terrace, we triple reference check every applicant and credit check them to ensure they have good character and previous landlords have had no issues with them in the past.
Regular Property Inspections Are Key
Keeping an eye on the property and its condition is key to ensuring your residental rental property stays in great shape at a lower cost. We recommend conducting a property inspection every 3 months, as we find regular inspections not only show the tenants you’re a hands-on landlord with strong interest in the property’s condition (encouraging the tenants to take better care of the property), it also helps you identify any repairs before it creates expensive huge long-term damage.
Consider The Age Of The Property Before Investing
Ensure you consider the property’s age before investing, as this can help determine the true cost of the property over time. As a general rule, unless the property has been re-modelled recently, older properties tend to require more regular maintenance, which can quickly turn a property into a black hole for your money if you’re not careful.
Avoid Installing Low Quality Fittings
It’s always tempting, but under-budgeting and purchasing low quality fittings, fixtures and appliances can often be the beginning of a long, costly journey for landlords. Unfortunately these low-quality products can often require regular maintenance more frequently and need to be replaced after a much shorter period – causing them to be more expensive than if a quality item was purchased in the first place.
Purchasing quality fixtures also means tenants will call less frequently for repairs, creating less stress for you.
Sometimes You Need To Spend A Small Amount To Save A Huge Amount of Money
Does the roof need to be repaired? Are the windows leaking? Is the property secure? Look out for any preventative repairs required during property inspections to reduce the occurrence of damage over time. A roof repair may seem expensive now, but it’ll be far worse down the line if you have to pay for the repair AND the water damage throughout the interior.
Try not to rely on tenants to inform you, as they may not necessarily know what to look out for or won’t notice until expensive damage has already occurred to your investment property.
Maintenance costs will almost always be a part of your budget - it's unavoidable. Depending on the current condition and the age of the property, as a general rule putting aside 5-10% of the total annual rental income for maintenance should be enough to deal with yearly wear and tear. It could also potentially provide you with money leftover at the end of the year to invest into the property and improve its rental value and prevent future maintenance issues.
It’s always important to remember that when a property’s in good condition and improved with strategic renovations, the rent generally increases, especially in the current Wellington market – perhaps not immediately but at the next opportunity when the rent can be increased, usually when its re-tenanted.