Rental property maintenance is a fact of life for every investor. It doesn’t matter how new your property is or how great its condition happens to be. At some point, you’re going to need a new roof or your water heater is going to begin leaking. It’s important to be prepared for these repairs and replacements. If you don’t have a maintenance reserve set up, you could find yourself struggling to pay for essential repairs.
Consider setting aside 10 percent of your rental income every month for repairs and maintenance. That may seem like a lot, and you likely won’t need all of it. However, it’s better to have more money in your maintenance reserve than you need. That way, you aren’t going into debt or scrambling to figure out how you’re going to pay for necessary repairs at your rental property.
Budgeting for Routine Maintenance
Routine maintenance includes things like toilets that won’t flush, broken appliances, new water heaters, and minor leaks that are found under faucets and sinks. Your tenant might report that a garbage disposal isn’t working or a clothes dryer isn’t drying. You might need to repaint your property between tenants or install new flooring. These are all routine maintenance items that will require funding from time to time. When you save 10 percent of your income in a maintenance reserve, you’ll find you have plenty of money to cover these expenses.
Preparing for Emergency Maintenance
It’s hard to prepare for emergency maintenance issues. You don’t know when a strong wind will blow a tree onto your roof or when a pipe will start leaking through a ceiling in your property. Emergency maintenance issues need to be taken care of right away because they usually impact habitability. Your tenant needs air conditioning in the summer and heat in the winter. While you’ll never be able to anticipate when these things are going to happen, you will always have peace of mind when your maintenance reserve is well-funded.
Documenting the Age and Condition of Your Systems
Preventative maintenance is a great idea for many reasons. First, it shows your tenants that you care about your property and you expect it to be well-maintained at all times. Second, it preserves the condition and the value of your asset. Third, it helps you to know when major replacements will need to be made. When you have your heating and cooling system serviced and inspected annually, you’ll know that it’s in good shape. Your technician can tell you about some of the things that may be wearing down on it, and you’ll have an idea of how many more years it will last. You can track when you’ll need to replace your roof, kitchen appliances, paint, and carpet. When you know that large expenses are a year or two away, you can make sure you have enough in your reserves to cover the expense.
We’re very good at budgeting and planning for maintenance. If you’d like some help with putting together a maintenance reserve, please contact us at San Diego Residential Property Management.