Budgeting for maintenance
As a property investor, you usually have two main focuses with your investment:
- Maximise the return on your investment;
- Minimise your exposure to risk
Repairs and maintenance relate to both.
When you start the process of looking for a tenant, your focus is usually securing the best price, in the shortest time and to the best tenant. Your best chance of successfully achieving these aims is to look at the presentation of the property during the leasing process.
Ask yourself: “Would I live here?”
Many rentals are in terrible condition. If you expect tenants to look beyond the mess, they will simply walk straight out.
Presenting a property in a beautiful state for lease doesn’t need to cost loads of money.
Maintenance jobs that make an impact
Consider these items, completed by professionals (keep the receipts and attached to the ingoing tenants’ condition report, as proof the property was professionally maintained prior to their tenancy):
- Cleaning including windows, fans, exhausts, blinds, walls
- Carpet cleaning
- Gardens maintenance
- Pool maintenance
- Fix any cracks in the walls
- Seal any leaks in the bathroom
- New carpet
- Property compliance items such as smoke alarms
Add value with a repaint
“Paint is the number one way to add value, it is something you can do so much with and it’s within the skill level of everybody,” Renovating for Profit’s founder Cherie Barber explains.
“It’s a really profitable renovation value-add. When it comes to paint, it really transforms a home.”
The average DIY paint job costs $3,500 for the internal walls and up to $5,500 when including the exterior.
In many case if the paint is looking a bit dull, one coat of paint should be enough and will therefore save you some money.
Paint doesn’t just have to go on the walls. The external walls, kitchen and bedroom cupboards, window frames and doors can also be painted to give your property a total refresh.
Budgeting for maintenance
It’s suggested to build up a ‘rainy day’ fund of approximately six months’ rent to cover unforeseen events such as big ticket repairs, rental arrears, vacancy or your own changes such as employment, relationship or an additional family member that could impact your income.
Should you find yourself in a situation where you don’t have the funds for work required, look into where the work is deemed an “emergency” by law. If yes, you must carry the repairs such as essential living items such as: hot water systems etc.
If no, don’t commit to the work. If yes, speak to your home loans specialist, they might be able to restructure your loan to cover it.