Over the last couple of posts we’ve taken a broad look at rental property management fees and more specifically on property leasing fees. Today we drill down once more and focus our attention on Rental Property Maintenance Fees.
Estimating an exact annual or monthly cost for maintenance can be difficult and is one of the areas landlords tend to under-estimate. A good rule of thumb is to budget approximately 1% of the property's value. So if your property is worth $240,000 then you would want to budget $2,400, or $200 per month.
The longer you own a property the better you will get at forecasting the maintenance fees that are appropriate.
The same things that would be causes of increased maintenance on your own home will be present on a rental property. these items include the age of the property, its size, the original condition, the climate, the type of property, and the quality of tenant. Plus keep in mind that if there are any HOA maintenance fees, that these should be factored in.
There will also be an increased cost when your property turns over, as you'll want to freshen things up to attract the next tenant. You might keep a separate fund that you contribute to monthly to provide funds to handle costs of maintenance and repair when going back into the rental phase.
If you are managing the property yourself then you have the option of doing the maintenance yourself. If you lack the time or know-how, then you will want to have a reliable maintenance contractor you trust. Ideally you've worked with them before.
If you're working with a property management company they will either have a maintenance person or team on staff, or relationships with maintenance contractors. Be sure to spell out the details of maintenance in your contract to include how much per hour they charge for on-staff maintenance, at what dollar of cost do they need to notify you before moving forward with a fix, if there is a mark-up on the charges for outside contractors they use, etc. You're paying a maintenance fee so you should expect that the property management company can handle the maintenance at least at the same price you could, and hopefully less expensive.
Remember that forecasting Rental Property Maintenance Fees is part of your due diligence to determine if a property is financially a good investment. You need to take into consideration all of the factors that affect on-going maintenance and then determine your forecasted budget. If you're working with a property manager, they will be able to assist you with coming up with an appropriate annual and monthly amount to budget.
GSPM assists property owners and investors in maximizing revenue potential while minimizing the hassles in marketing and managing their properties. We recognize that there are a lot of factors that go into making a property a successful investment and put our experience and knowledge to work for you. Call us at 404-254-4502 or complete our Fast Form to learn more about our services.