April 23, 2024

Jocuri

Mad about real estate

How You Can Curb Rental Property Maintenance and Repair Costs

Real estate investing involves the acquisition, holding, and sale of rights in real property with the intention to generate more than enough cash inflows to cover cash outflows so at the end of the day the investor enjoys a favorable rate of return on his or her investment.

In other words, successful real estate investing is all about owning rental properties that ultimately make the investor a profit.

It’s one thing to collect substantial rents. All landlords, of course, would welcome favorable rents in order to amp up the inflow of cash. But investors who turn a blind eye to maintenance and repair costs can also discover that, despite abundant income streams, their cash flow is surprisingly lower than expected and the profitability of their real estate investment bitterly disappointing.

In this article, I want focus on the need for real estate investors to reduce and eliminate money-wasting property maintenance and repair expenses by showing you five ways that you can get that accomplished.

1) Buy Low-maintenance Properties

This seems obvious, but it’s not. Of course, you wouldn’t knowingly buy a money pit, but investors commonly fall victim to the siren call of price or curb appeal and totally disregard the issue of maintenance. You can’t let this happen to you. Always prefer rental properties that are constructed with materials and fixtures that require less maintenance, and are built to last with minimal care; the same applies to yards, shrubs, and landscaping.

2) Toughen Your Tenant Selection

Apartment buildings are not the only part of your investment that can require either low or high-maintenance–there are also low-maintenance and high-maintenance tenants. The idea, of course, is to avoid the latter and select the former. Watch out for chronic complainers and people who show no “house sense.” You might be surprised to discover that you can eliminate up to one-half of your maintenance, repair, cleaning, and wear-and-tear costs simply by selecting tenants who demonstrate personal responsibility. Bear in mind that things seldom break by themselves and toilets do not just stop up and overflow.

3) Impose Stricter Repair Clauses

A good way to promote tenant responsibility a bit further is to shift the first $100 or so of every repair cost onto their tenants’ shoulders; you can also impose higher security deposits. Naturally, you should tread lightly in this case because no landlord wants to alienate or keep out good tenants, but it is an option worth considering if you can’t seem to curb maintenance and repair costs any other way.

4) Enlist a Handyman

Even if you plan to do some of the work yourself, it’s still a good idea to build a relationship with a person on whom you can regularly depend and trust. Employing a trustworthy and competent all-around handyman (or persons) to take care of your day-to-day property maintenance and repairs will do wonders to ease the drain on your time and pocketbook. Moreover, it improves your status with tenants if they know the landlord is listening and is responsive.

5) Engage in Preventive Maintenance

The idea here is to save you money in the long run by fixing something correctly before it either breaks or gets worse. When a roof or plumbing leak isn’t fixed immediately, for instance, the damage to floors and ceilings that could result may cost you a lot more than a simple repair. Just apply the same principle to your rental properties that you would to your car. Anticipate and alleviate repairs when the cost is relatively small and always ask your maintenance experts how you might replace high-maintenance items with low-maintenance items.

You’ve heard it before. Real estate investing must be run as a business because you are the owner of the business. Real estate investors that pay close attention to a property’s entire financial performance, including maintenance and repairs, are more likely to succeed at generating a profit from rental property investment than others less discerning. Here’s to your success.