There are many different factors to consider when setting a budget for maintenance on your investment property. The age of the home will play a large part in this decision.
There are a number of formulas for maintenance, the most common is the 1% rule – which is the maintenance budget should be 1% of the property value. For example, if your home is valued at $500,000 then you should spend $5,000 per year on maintenance.
We have assessed the properties we manage and found the average items and spend amounts for maintenance. Hopefully this will give you an idea on what to budget for.
We have not included renovations to kitchens, bathrooms, flooring and painting. These are items that are done every 10-20 years depending on condition and are done to maintain the value of the home. Our examples also don’t include insurance work or large repairs such as roof leaks or gutter replacements.
The standard annual maintenance includes:
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- Pest control $150
- Pest control with termite inspection $270
- Leaking tap $150
- Light repair $250
- Power point repair $170
- Gutters cleaned $200 – $400
- Blocked drains/toilet $250 – $450
- Smoke alarms $129
- Tree/hedge trimming $800
- Air conditioning service $150
- Reseal bath/shower silicone $150
- Regrout shower – $800
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There are other items that will only need replacing every 10 – 15 years such as ovens, air conditioners but also items that don’t last as long as 10 years like dishwashers.
Making sure you budget on these bigger ticket items during the years will ensure you have the funds when and if they inevitably need replacing. We can always hold back a “reserve” of money in our trust account for these items if you would like us to. We have some owners that build up a reserve of $2,000 – $5,000 so that when the unexpected happens the funds are easily available. If this is something that you would like us to setup for you, please let Rebecca or Simone know.
Larger items to budget every 6 – 15 years:
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- Dishwasher $900
- Oven $1,200
- Stove $1,000
- Rangehood $500
- Hot water system $2,200
- Toilet $650
- Replace tap/mixer $250
- Air conditioner replacement $3,000
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These prices are based on an average cost. Some owners have elected for cheaper models and some a more expensive model.
The average time for trades to attend to work is different depending on the urgency of the job. As a rough guide – emergency repairs – 1 day, important repairs – 6 days and normal repairs – 9 days. The time for quotes has stepped out considerably with the minimum time being between 21 -54 days and some trades are now charging for quotes.
Unfortunately, many tradespeople do not have time to quote for standard items. Things that could be done within an hour or 2 shouldn’t require a quote and all emergency maintenance should be done immediately.
We have a reliable pool of tradespeople, who have been carefully selected on work quality and efficiency and who are qualified and insured for the work that is needed.
Larger items such as carpet or lino replacement, painting or items more than $1500 – $2000 can and should be quoted on and we can facilitate that.
Is is important to remember that there may be specific maintenance requirements to maintain your insurance as well. EBM insurance requires all properties over 70 years old to be rewired and replumbed within the last 35 years. Make sure to check your policy for any of these requirements.
Hopefully this guide will assist you in preparing for your annual maintenance budget. A well maintained property will result in quality tenants and improved rental returns and property value.