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.

What is the Typical Charge for Rental Property Maintenance

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.

What Items Have An Impact on Maintenance Fees

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.

Who Handles the Actual Property Maintenance Work

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.

Rental property maintenance is something you will deal with if you own rental property. If you own your own home then you really should be used to performing maintenance, as you should be doing so on your personal residence. The difference is you can perform maintenance on your own residence to your satisfaction and timelines, but with a rental property there is a second party to consider. And how does the cost of the maintenance affect your investment profitability?

While the hope is that most rental relationships are honest and mutually beneficial, it is still a relationship where each side has their own wants and needs. You want to receive payment on time and spend as little as possible on the home (less expenses = more profit). The tenant wants everything in the property work and perform as expected for the rent paid. When it doesn’t, they they won't care what it costs to "make things right.” Thus, property maintenance can be the key to a good rental relationship.

Rental Property Maintenance tips

  1. Plan Out Maintenance Over The Year

    Scheduling maintenance throughout the year helps you balance the expenses with incoming rental payments to keep a positive cash flow. By understanding the impending costs, you can set aside a certain amount from each month’s rental payment to cover them. It also allows you to inform the tenant about maintenance crews being at the property.

  2. Set A Maintenance Reserve

    While having a solid maintenance plan is a great first step, your property will require maintenance that is unexpected. In these cases, you will need to come up with the cash to cover the charges. It's not a matter of if this will happen, but rather when it will happen. Typically you would want to set aside 1 - 3% of the property value for maintenance. So setting aside an additional 1% will help with unexpected costs. Over time you will have a better understanding of what needs to be set aside.

  3. Implement a Maintenance Request Process

    While much of the property maintenance will be planned, you need to implement a process for your tenant to request maintenance. This will ensure your tenant knows what to do if maintenance is required, allows you to record maintenance items outside of the norm, and track where you are in resolving the issue. The historical information recorded will help you budget for maintenance and repairs down the road. It also will provide a level of comfort to your tenant.

  4. Handle Maintenance Request Promptly

    There are two huge reasons why you should resolve maintenance and repair issues immediately. First, you owe a duty to your tenant to provide a safe and comfortable place to live. Secondly, you want to prevent any further damage by resolving the issue ASAP. There is also a psychological effect. If your tenant sees that you care about the property, they will be more likely to treat the property well.

    When an issue is reported do your best to resolve it within 24 hours. If it will take longer, be sure to communicate to your tenant what you have done and why it will take a little longer to fix the issue.

Wrap Up

Handling rental property maintenance issues can be one of the most challenging aspects of being a property investor and landlord. As in most cases, communication is the key to keeping maintenance issues as a minor issue rather than escalating to a larger one. Having a plan and process in place will ensure that when something does go wrong, there is a path to get things back on track.

GSR Property Manager assists property owners in maximizing revenue potential while minimizing the hassles in managing their properties. There are a lot of factors that go into making a property a successful investment and we put our experience to work for you. Call us at 404-254-4502 or complete our Fast Form to learn more about our services.