Regular maintenance to your rental property is so vitally important to its ultimate success. Budgets and wishes aside, the law of nature do not stop for anyone. With this in mind resign yourself to the idea of spending and/or saving money every month on your rental. Items like paint, flooring, appliances, roofing, plumbing fixtures, and such start to wear out the moment they are installed. Without a concerted effort to budget for their inevitable replacement you will be caught in downward spiral.
We have all seen the property in the neighborhood. First the regular clean up and yard maintenance is deferred. Rents fall since the property does not look its best and now the owner has an even more difficult time being able to afford the maintenance and keep it rented. Since budgets are strained more maintenance is deferred, and after a time the owner has to “eat the cow all at once” in order to pull the property back up. This hurts and is often not possible.
So how much do I budget? Well, if this is a property you have owned for some time look back at your records and work it out. If it a new property there is several ways of figuring budget forecast. The most strategic since we all live on the monthly rent cycle is to budget monthly. Usually 10-20% of the monthly rental income. It can be more depending on the current condition of the property. Start with a high estimation until you have an accurate track record. This way you want be caught off guard with a big expense such as a new roof or heating system. Also, consider a separate bank account for the funds you are budgeting. Human nature being what it is, out of site is off limits.
–Happy Landlording