Do you have enough money set aside to maintain your investment properties? This helpful guide can help you create a budget for investment property maintenance.
Keyword(s): investment property maintenance
Did you know the average rent cost for a two-bedroom apartment in the United States is $1,180 per month?
As an investment property owner, your goal is to make the most money per unit to keep growing your portfolio. However, if you fail to keep up with your investment properties' maintenance, your business will suffer.
Read on to learn about these investment property maintenance tips.
1. Property Taxes
If you're a property investor, property taxes are one of the first things you need to budget for. This is a fixed expense that you will have to account for when you make a budget.
The amount you pay on taxes will depend on your state, jurisdiction, and other local ordinances. Find out what your tax obligations are before you decide to invest in a new property.
2. Property Maintenance
Property owners should also set aside 10 to 15 percent of their annual rental income for property maintenance. The amount of maintenance required will depend on the type of property, interior, and exterior.
Some of the most common maintenance expenses include landscaping, pool cleaning, tree trimming, pest control, light bulbs, HVAC maintenance, and maintenance equipment.
If you own residential properties, you know most tenants will pay for gas, electricity, or heating. However, even if your tenants will pay for most utilities, as an owner, you will be responsible for sewer, water, trash, and recycling.
Depending on the size of the property, the monthly expenses range from $30 to $200.
4. Property Management Services
After you have acquired several investment properties, it might become more difficult to keep up with your properties.
The best way to manage and upkeep your properties is by hiring a property management service. Even though this is an added expense, property management companies add a lot of value.
They will be able to help you with competitive rental rates, maintenance requests, rent collecting, finding tenants, and more. Most property owners set aside about 8 to 10 percent of rental fees to pay for these services.
As a property investor, you know that over time properties become dated, and they need improvements. To maintain the value of your properties, you need to invest money in property improvements.
Some of the most common property improvements include updating appliances, new hardware, painting, installing new windows, and upgrading the HVAC system.
Property improvements are also necessary to increase rent and increase property values over time.
6. Homeowners Insurance
Homeowners insurance is the one expense that, as an investor, you cannot give up. For the most part, the cost of homeowners insurance will be included in the mortgage payment. If this isn't the case, you will have to include insurance costs into your budget.
Homeowners insurance will protect your property against theft, floods, wind, etc.
Investment Property Maintenance
Now that you know more about investment property maintenance, you're ready to take your investment portfolio to the next level.
Some of the most important things you need to budget for are homeowners insurance, maintenance, property management, property taxes, and more.
Are you ready to give property management a try? Contact us today for a consultation.