Tag Archives: maintenance

Property Maintenance: How To Cope With Ongoing Property and Building Maintenance on Your Investment Property

property maintenance

How To Cope With Property Maintenance

With no exceptions, all of the properties in our portfolio have required money to be spent on ongoing property maintenance and repairs.

[box style=”rounded” border=”full”]In fact – what is it with ovens??? In the last twelve months, I’ve had to have new ovens installed in three of our properties.[/box]

Those of you who have an investment property already will most likely be familiar with the sinking feeling as you get told there is some kind of maintenance issue that needs attention.

If you are using a buy and hold strategy it’s more likely you’ll start out with a newer property. This is great when you are someone who still works a full time job, long hours or simply want to be more passive with their investing.

But… as years pass, things start to breakdown, wear out and need repair and maintenance.

Although these maintenance requests can sometimes be somewhat frustrating, I want to give you some mechanisms I have used over the years of my investing that make the matter of property and building maintenance all a little easier to cope with.

Change Your Attitude

It’s easy to think that tenants break things through lack of care. But if you actually took time to stop and think about how many times you replace, repair or maintain things around your own home you’ll realize that maintenance on an investment property needs to be done on about the same frequency as you need to do these same things in your own home.

It’s true – a house that you rent to a family of adults and children may require more repairs than a property that is rented by a single adult in their senior years. But either way, things will break. They will need replacing and sometimes, the gods just decide to make things stop working for no good reason at all!

The attitude you take towards maintenance of your properties is important. What you purchase is an investment. Your investment will only continue to rise in value and keep it’s earning potential if it is kept in good condition. So look on the bright side and see your repair and maintenance as a continued investment in the value of your portfolio.

property maintenance improves property valueKeeping On Top Of Property Maintenance

It’s always easier to catch maintenance issues while they are in early stages rather than for them to go unnoticed until major damage occurs. It’s for this reason many investors choose to use a company that specializes in property maintenance to do a regular maintenance check.

You can give the company a copy of the Property Maintenance Checklist I have created and ask them to report back to you.

Your Property Manager should also be providing you with detailed reports on the condition of your property several times a year. Please read these reports rather than put them on the filing pile never to see the light of day again.

Track the reports and take careful notice of any items that you see slip from being listed in ‘good’ condition to ‘poor’.   Stay in close contact with your Property Manager about anything that concerns you and don’t be afraid to ask for more information, photos or anything that will help you to stay on top of the condition of your property.

Using your property management reports and a house maintenance service company should see you cover every angle.

What REALLY Needs Doing?

I’ve created this Property Maintenance Checklist that will be helpful for everyone who owns an investment property and even for those living in your own home and want to keep it in a proper condition.

Content of this checklist is grouped according to different times of a year, so each section contains appropriate seasonal recommendations and tips on maintaining your investment property both indoor and outdoor.

If you find that there starts to be major items that need improving or replacing, it might get to the point where a more extensive cosmetic renovation is an option.

We have done this on a couple of our properties that were in need of a major upgrade. It’s when you decide to do the renovation that is important. The most ideal times to spend money on a cosmetic renovation are when you know you will need a bank valuation done in the near future or if you are looking to sell the property. Any time other than these can mean you are simply spending money without getting any significant return.

As an example, our property in Gamble Green is in desperate need of new carpet. The current tenant has been in there for over 5 years. He’s a tradesman who comes inside with boots on and doesn’t particularly want to have to be worried about having new carpet to take care of. We could not get a significant increase in rent for the property for the expense so for the moment; we’ll keep our money in the bank.

As a landlord it’s vital you also maintain certain safety standards. Examples of this are to have fire alarms fitted and working; safety switches that work, security screens on doors and windows etc.

Who’s Going To Do The Work???

If you’re great on the tools yourself you can save a lot of money doing property maintenance yourself. That is great – if you have the time and live nearby. In our case, most of our properties are either 4-5 hours away, or in other States of Australia so this is not an option. Plus my husband is a lousy handyman (but I still love him to bits icon_smile ).   So most of the time it’s going to be a matter of letting the experts do their job while you get on with doing yours.

Your Property Manager or building maintenance company can source and manage reliable tradies to do repair and maintenance work for you. If you are self managing a property (which I don’t recommend), there are lots of online quoting websites tradies use now like http://www.tradeezi.com.au/ and http://www.quote-trade-service.com.au/ where you can seek out someone in the area of the property to do the work for you.

Keep a record of all your expenses relating to property maintenance. It’s likely all of these can be claimed as a tax deduction but your accountant will make that formal decision for you.

How To Manage The Cost Of Ongoing Property Maintenance

I would like to think you always have a small amount of funds set aside for unexpected expenses relating to your properties. Allocating even a small amount each week will ease the burden of paying for a regular maintenance plan. It’s easier to fund small repairs but this won’t mean there will be random acts of replacement necessary…. you don’t’ usually get much notice when the water heater decides to blow up!

We have a Line of Credit set up specifically for this purpose.   Let’s say it costs $1,000 for a new oven. We pay this from our line of credit, so we are charged interest on the $1000 @5% = $50 per annum. That $50 is a tax deductible expense against the income from our properties. So the real cost to buy the new oven is in fact very little.

In my experience the areas requiring the most constant expenditure are hot water systems, toilet cisterns and ovens.

How to manage the ongoing property maintenance can be a big fear for newer investors but in the big picture of investing, it’s simply one of the learning curves that you will go through. There are always people you can call on for support and advice if you need it.

The benefits of maintaining a valuable piece of real estate far out way any concerns with small amount of expense required for property maintenance to keep your asset in good condition and highly attractive for tenants.




What tips or challenges would you add for managing property maintenance?



Home Renovations – Renovating for Profit On A Budget

home renovations - renovate for a profitIf you are considering doing some home renovations, renovating for profit doesn’t have to mean you spend a fortune. In fact, some of the most simple and cosmetic renovations can achieve the biggest impressions and improvements to the look and feel of your property.
Renovating a home is an investment strategy that appeals to lots of people. Spending some money, time and energy on doing a place up and selling it off for a profit is a great way to boost your profits from property when done correctly.

Renovating For Long Term Equity Gain

You can also improve your profits by doing cosmetic renovations and upkeep on a property that you keep long term. Smart renovating can lead to capital growth and strategic improvements can be a good precautionary measure against maintenance issues on a property you intend to keep for a while and rent out.

If you have a buy and hold type property, unless there are major issues, it can be easy to ignore some ongoing maintenance tasks. Regular contact with your property manager should keep you informed of larger maintenance issues as they arise. But let me tell you that your property manager and you don’t always have the same standards when it comes to what is acceptable. We’ve certainly experienced this ourselves!

We were receiving our property inspection reports which seemed to be getting progressively worse. We decided to personally visit the property and found the dirt and state of the walls and paint work was disgusting. After studying Jane Slack-Smith’s Ultimate Guide To Renovations, we decided the next time the property was in-between tenants, we would go in and give the place a quick cosmetic reno.

You can watch the video to see our fabulous results.

Home Renovations - Renovating for Profit in Mandurah

Beware!! Renovating for Profit On A Budget Does Not Work……

Unless….. you follow these three guidelines:

1.  Stay to Budget By HAVING a Budget!

Remember that renovating strategically isn’t about painting a wall and calling it a day. It’s about a careful consideration of adding real value to a property in the market, and that takes some homework as well as sweat equity.

Take a checklist around the entire project and mark where you intend to spend money.  You can start today by downloading this Sample Renovation Checklist and Renovation Summary Guide  immediately. You can see how detailed your costings need to be. Divide your list into ‘wants’ and ‘needs’. Every likely cost should to be added to a spreadsheet plus an amount for ‘variance’.

You should then consider how much you think your improvements will add to the market value of your property to determine if the whole exercise will actually result in a profit. Additional fees and expenses such as agents fees, marketing and stamp duty all need to be taken into account.

Plenty of people have an appetite for doing a place up and selling for a profit. But not doing enough prior planning or keeping track of the numbers is one of the reasons why renovation costs can blow out and a disappointing profit margin can be the result.
Any time you are spending money on a property you want to be sure you’ve done a good feasibility on the entire project!

2.  DIY Home Renovations

There is a saying ‘money makes the world go around’. I will be the first one to suggest you save money on your home renovation wherever you can. But unless you are a skilled tradesperson, it’s likely there will be at least some tasks required that don’t fall within your expertise. The best thing you could do is to employ a tradesperson to do the work for you.

DIY renovating can certainly save you dollars. It can also cost you big time if things don’t go to plan. You might take weeks to complete a task that a tradesperson can get done in a matter of hours or days. A task completed quickly and done to expert standards will mean you can move forward quickly. This can become extremely important if your objective is to get the property tenanted or sold.

Every week the project goes uncompleted, you could be paying additional interest if you are borrowing money to do the renovation in the first place. As you create your feasibility, you may be surprised to find DIY renovation costs are higher than you expect.

3.  Renovate for Profit – Where To Start

The key lies in understanding which improvements will return you the highest possible profits. As you can see in our recent renovation, paint is inexpensive and can instantly create a fresh, new look. Despite my earlier suggestion to avoid DIY, painting is relatively easy to do yourself and you can save lots of money. Even if you do need to pay someone to do more difficult areas or outside work you will most likely get back more than you spend.

The other big money spinners are kitchen renovations and bathroom renovations. These rooms will definitely start to chew up your budget though. So again, lots of planning and cost analysis is important before you even begin. Carefully consider the demographics of potential buyers or renters to be sure you meet their needs. Get several quotes before you commit to the task. https://www.hgquickquote.com.au/ is a great place for finding qualified service professionals to quote on your home renovations.

If you buy a property and plan to renovate for a profit, it might be in a cash chunk from a sale or from a rise in equity in your buy and hold property. Either way, check your tax obligations and entitlements here.

Any More Home Renovations?

We have a townhouse in a suburb just 6kms from Perth City that our children currently rent from us (that’s another story!). When they re-locate in six months time, we plan to use the process within The Ultimate Guide to Renovations (TUGR) again to create a more extensive cosmetic renovation. This renovating course has been incredibly comprehensive and so motivating. Following TUGR guidelines will mean we can significantly raise the rent and increase our equity. That’s what I call renovating for a profit! I can’t wait to get started!…

Jane Slack-Smith has a FREE chapter of her new book available at the moment. It’s all about renovating for the investor and home owner. Grab it today. I’m confident you’ll LOVE it as much as I do!