Cost of repairs and maintenance for a rental property?
Mendell Gosnell - Wednesday, July 8, 2015
PART 1 of 2 Let me start by emphasizing that Real Estate is a great investment. However, it is not a get rich scheme and takes discipline and a long-term game plan. Some people think you can just - buy, rent and watch the money come in. That’s what some envision when owning an investment property. In this two part blog, we are going to take a look at what to expect when owning a rental property in regards to ongoing maintenance expenses. Rental properties are a valuable asset if you take care of them and have quality property management.
What factors affect the cost of upkeep? There are many factors that contribute to the cost upkeep on a rental property but here are a few:
AGE OF RENTAL PROPERTY - How old is your home or rental property? The answer to this question will play a large role in determining maintenance and upkeep costs. Newer rentals (5- 10 years old) require less maintenance while older homes (10 – 20 y/o) typically require more time and money for maintenance (Exterior paint, general upkeep and repairs, etc…). If a home is 20 – 30 y/o, that is when you will start to see the property require more TLC from the top down (roof repair, hot water heater, plumbing, siding, appliances, etc.)
WEATHER – Here in the Willamette Valley (Salem, Albany, Corvallis and surrounding areas) we see every extreme of weather from rain, winds and frost to heat and humidity. The pounding a property takes from the seasons here in the Willamette Valley play a crucial role in the longevity of the property.
LOCATION – Often overlooked, the location of your home is key as well. If your home is located at the bottom of a hill/slope where water drains and collects or any other environmental strains, this should be carefully considered in regards to the cost of homeownership here in the Willamette Valley.
TYPE OF RENTAL PROPERTY - Is your property Single-family or multi-family or a condo or townhome? Condos or any other properties cared for by HOA generally have lower maintenance costs since the common areas and common structures are paid by the association – of course the tradeoff is you generally are paying a monthly association fee. Larger apartment complexes cost more but as a percentage they cost less…you gain the economy of scale when you have a larger rental complex.
The next part of the series we will get to the answer of the question “What should I expect to spend?” I will give you two practical solutions that will help in determining the cost and upkeep of home ownership that should be expected. Happy investing! -Jesse Barnes Business Development/Marketing Manager