In our previous blog, we introduced the concept of property maintenance, an essential aspect for anyone involved in property investment whether you’re a seasoned investor or just starting out. Now it’s time to dive deeper to unveil the two main types of property maintenance that can significantly enhance the value and longevity of your investment property.
Many investors view property maintenance as a considerable expense. However, the smart ones know it as a strategic investment. Understanding the different types of property maintenance is key to maximising the returns on your investment property.
This blog will provide you with a clear and comprehensive guide to the two main types of property maintenance. By understanding these categories, you can make informed decisions about where to allocate your maintenance budget to make the biggest impact on your property’s value and appeal.
The Importance of Choosing The Right Type
It’s essential to recognise that not all maintenance efforts will yield the same benefits for your investment property. However, we understand that property maintenance might not be where you’re eager to spend your hard-earned income.
Regardless, maintaining a well-kept property is not just advisable; it’s financially prudent for investors.
Reduce Long-Term Repair Costs
Regular property maintenance significantly reduces long-term repair costs by addressing issues early before they escalate into major, expensive problems. Routine inspections help identify potential issues, such as leaky taps or early signs of structural damage, allowing for cost-effective solutions.
For example, fixing a moisture issue with a $100 exhaust fan can prevent costly mould removal, and early repair of leaky taps can avoid expensive emergency plumbing fees. Additionally, an annual pest inspection can prevent extensive damage, saving thousands in maintenance costs.
Decrease Vacancy Rates
Tenants prefer clean, well-maintained properties, and addressing repair requests promptly can encourage lease renewals, keeping your rental income steady.
Preventative maintenance, like updating window coverings or improving bathroom ventilation, costs significantly less annually than the potential loss of income from vacancy. A vacant apartment that rents for $750 per week could lead to a loss of over $3,000 if it remains unoccupied for four weeks.
Command a Higher Rental Rate
Desirable features and upkeep allow landlords to set competitive, yet premium rental prices, attracting and retaining quality tenants.
Modernising wet areas, repainting interiors, updating window coverings, and replacing old flooring with preferred options like hardwood are all examples of improvements that can attract quality tenants and justify higher rent, ensuring your property remains competitive and well-valued.
Reduce Your Tax Bill
Did you know that costs for repairs (like replacing worn or broken items) and maintenance (to address tenant-caused wear and tear) can be claimed as tax deductions?
While renovations aren’t deductible, eligible expenses include refreshing paint, upgrading window coverings, fly screens, and locks for under $300, and fence repairs or improvements. These measures not only enhance your property’s appeal but also offer immediate tax benefits, helping to lower your taxable income.
Increase the Value of Your Property
Investing in home renovations, like a $10,000 kitchen upgrade, can potentially add approximately $50,000 to $60,000 to your property’s worth at sale. Focusing on value-adding maintenance, such as updating flooring, fixtures, and security, enhances your property’s appeal without the need for more costly renovations.
These strategic updates not only boost your property’s market value but can also contribute to a higher sales price and capital gains when it’s time to sell, demonstrating the long-term financial benefits of targeted property improvements.
Now that you know what the benefits are clearly, let’s get into discussing the two main types of property maintenance: Proactive Maintenance and Reactive Maintenance
Proactive Maintenance
Out of the two main types of property maintenance, the one most people think about is proactive maintenance.
Proactive property maintenance, also known as preventive maintenance, focuses on staying ahead by early identification and addressing wear and tear to ensure your property remains in excellent condition. This approach involves conducting routine inspections and scheduling annual maintenance tasks to protect your investment’s quality.
For example, an annual pest inspection could cost around $80 per hour and detect early signs of infestation, potentially saving you from spending over $2,500 on extensive termite damage.
The benefits of proactive maintenance include:
- Preventing Expensive Emergencies, such as mould, leaky taps, and sagging door hinges to significantly reduces the risk of costly, urgent repairs.
- Facilitating Budgeting, as forward planning allows for predictable expenses, enabling precise budget allocation without overspending.
- Maintaining Rental Appeal, which will help you attract and retain desirable tenants
The main challenge of proactive maintenance is that it requires planning and additional effort to organise routine inspections and maintenance jobs. This is a key reason why 80% of investors prefer partnering with property managers who can oversee these tasks, ensuring the property’s upkeep without the owner’s direct involvement.
Reactive Maintenance
On the other hand, reactive maintenance is characterised by addressing urgent or emergency issues as they arise within a rental property. This approach involves responding to problems as they occur and aiming to resolve them quickly.
An example of this type of property maintenance is dealing with a reported roof leak. Under reactive maintenance, you would engage with the necessary people, such as engineers and roof repairers, after the report is submitted to fix the roof leak.
The benefits of reactive maintenance include needing Minimal Initial Planning, as this style doesn’t require the forward planning associated with routine inspections and annual maintenance. This means that your time and budget is more flexible, allowing you to focus on different tasks that may be more urgent.
However, if you like to work within clear plans, there are a few disadvantages to reactive maintenance.
- Higher Costs are often associated with reactive maintenance as emergency repairs often cost much more than regular or minor fixes.
- Budgeting Challenges can occur as without scheduled maintenance, predicting yearly expenses becomes difficult and may lead to potential budget overruns.
- Increased Stress from managing urgent maintenance requests can occur, especially if emergencies happen during evenings or weekends.
The best preparation for good work tomorrow is to do good work today. – Elbert Hubbard
So then… out of the two types of property maintenance, which one is best?
You may actually find that a combination of both will work the best for you. Scheduling for regular or expected issues can help you keep your building in top shape, whilst ensuring that you have the time, budget, and flexibility to react to any inevitable emergencies will keep all your bases covered.
Juggling all of this can be difficult! Use our decades of experience to help you. Contact us today.