Investing in property has become a popular option over the past 20 years, with many Australians using it to create an excellent nest egg to pass onto their children. Although purchasing the property and finding tenants are the first steps, however, they’re by no means the last.
Many investors forget that their properties require regular upkeep and maintenance. It’s similar to buying a vintage car – after spending so much money on it, you wouldn’t just leave it out in the rain to rust prior to reselling it. An investment property is no different from this.
Despite being aware of the need for maintenance, not many investors know how to go about it. In this article, we’re going to teach you what you need to know about maintaining your rental property.
Plan in advance
Planning ahead is an essential skill to have when making any form of investment, but it’s particularly important for property. Plan when your cash flow will be coming in from and set up an expenses plan to figure out when you’ll have to pay for something.
By doing this, you’ll be able to generate an accurate insight into the type of investment you can afford, as well as find an asset that’s best suited to your current circumstances.
What should you plan for?
This largely depends on the type of property you’ve invested in. If you’ve decided to invest in a residential apartment building or another multi-title property, there’ll usually be a body corporate in place to oversee the building’s general upkeep. They’ll also be able to manage the maintenance of any communal areas your property may have.
This will usually be covered by paying an annual body corporate fee, which is something you should plan for in advance. You should also be wary that any additional works required to your property will come with extra fees.
Work around these charges by creating a maintenance buffer and pay money into it each month. Although the fees can vary dramatically, they shouldn’t be excessive unless major repairs are required for your property.
Expect the unexpected
In addition to body corporate fees, reparations payments for any emergency works will quickly eat into your returns if you haven’t accounted for them in your initial investment plan.
Internal appliances such as heating, plumbing and cooking appliances should be accounted for within your maintenance budget. Make sure that this fund has at least enough money to cover the failure of these products.
To keep your cash flow forecast accurate, you should also factor in more general items that will require maintenance on a regular basis. Remember – your rental property is continuously generating income for you, so you should make sure it’s in top condition.
Ensure that all of the property’s gardens are tended to by a professional to maintain its kerb appeal. You should also consider hiring a professional to keep the internal communal areas (if any) clean and tidy.
In real estate, first impressions are key. Do what you can to keep your property looking fantastic and that rental revenue will keep coming in.