Maintaining your rental property in good condition is essential for numerous reasons. Property condition affects its value and your overall return on investment when you sell the property years from now. It dictates how much you can charge tenants for a monthly rental rate and your cash flow as a result. Safety issues could even impact your liability risk. As you can see, property maintenance on your rental property deserves your full attention. With a limited amount of money available at any given time, you must make smart decisions about how to prioritize these tasks.
Focus on Safety Concerns First
The safety of your tenants as well as of anyone else who steps foot on the property is a top concern. As the property owner, you may be held liable for injuries that they sustain on the property if these injuries are related to maintenance neglect. As soon as you become aware of an issue, it should receive your prompt attention. To ensure that you can afford to tackle these types of urgent situations, maintain funds in a reserve account for this purpose.
Identify Issues that Impact Overall Property Condition
Some significant issues may affect the overall condition of the property if they are not addressed quickly. For example, minor roofing damage may quickly turn into a major issue with water leaks, pest infestations, mold growth and more. A simple roof repair could prevent these serious damaging problems from occurring and may delay the need for a full roof replacement.
Address Cosmetic Concerns
You understandably want your rental property to look amazing. Keeping its condition in line with competing rental properties in the area is essential, but this should fall behind safety and property condition in terms of priorities. Keep in mind that there are affordable ways to update your rental property from a cosmetic perspective while keeping maintenance costs lower. For example, rather than installing wood floor, install wood laminate that is more affordable and less likely to be damaged.
Property maintenance and repair work are necessary for any rental property, so you need to financially plan for them. In addition to keeping the tenants’ deposits in escrow, you should regularly allocate a portion of their rental payments into a reserve account rather than pocket the net proceeds as pure profit. By doing so, you may keep property value and cash flow high and enjoy overall increased profitability in the years ahead.