Maintaining a home
How much should landlords put aside for property maintenance?
18 October 2023
As a landlord, keeping your property in good condition is crucial. Not only will it help keep your tenants happy, but it will also help to protect your investment. But how much should landlords put aside for property maintenance?
The key to successful budgeting is to be aware of the factors that affect property maintenance. This will help you to understand the costs of regular maintenance versus emergency repairs, and to prepare your property maintenance fund.
The importance of budgeting for property maintenance
Maintenance is key to keeping your property in good condition, preventing damage, and avoiding expensive repairs. A regular maintenance schedule can help you identify any potential issues early, before they become more significant and expensive problems.
Factors that affect property maintenance
The cost of property maintenance can vary significantly depending on several factors.
Age and condition of the property
Older properties may require more maintenance compared to a newer property that would be expected have lower maintenance costs.
The choice of construction materials can influence maintenance requirements and costs. High-quality materials may be more durable, reducing the need for frequent repairs.
Properties in regions with extreme weather conditions may require additional maintenance to withstand the elements. Severe weather events, such as storms or heavy snowfall, can cause damage that needs immediate attention.
Frequency of maintenance
Regular maintenance, such as inspecting and servicing heating and air conditioning systems or cleaning gutters, helps prevent costly repairs. Neglecting routine maintenance tasks can lead to more significant problems and increased expenses.
The consequences of neglecting property maintenance
It may impact your insurance coverage
Suncorp Landlord Insurance can help protect against loss or damage to your investment property caused by certain weather events. However, it’s important to note that our coverage doesn't extend to damage caused by wear, tear, gradual deterioration, or the home not being in good condition.
Undertaking regular maintenance on your property may reduce your chances that loss or damage to your property is not covered under your policy. Learn more about the terms, conditions and exclusions by reading the relevant Product Disclosure Statement.
Increased repair costs
Ignoring maintenance can result in minor issues turning into major expensive repairs. Timely maintenance helps address problems before they escalate.
Reduced property value
A poorly maintained property loses its appeal and value. Regular upkeep ensures your property retains its market value and attracts potential tenants.
Potential legal issues
Negligence in property maintenance may result in legal liabilities if tenants or visitors are injured on your premises. Adhering to safety standards and promptly addressing maintenance concerns minimises the risk of legal disputes.
Difficulty attracting tenants
Neglected properties develop a reputation for poor maintenance, making it challenging to attract reliable tenants. Well-maintained properties are more desirable, increasing your chances of securing quality tenants.
Tips for covering maintenance costs
Including maintenance costs in rent calculations
When setting the rent for your property, remember to include maintenance costs in your calculations. This way, you can ensure that your property generates enough income to cover its expenses, including maintenance costs.
Remember, proactive maintenance not only helps you maintain a well-functioning property but can also provide financial advantages in terms of tax benefits.
Preparing your property maintenance fund
To prepare your property maintenance fund, you need to decide whether to save for maintenance or use a form of credit for financing.
Saving for maintenance vs using a form of credit
Saving for maintenance is an excellent way to have funds readily available when needed. You can set up a separate account for maintenance and contribute a specific amount every month. However, if you don’t have enough money saved, you may be able use some form of credit to cover the cost of repairs. Credit can be helpful, but there will have interest payable, which can add up over time, and come with other risks which you would need to consider.
Remember your insurance
As a landlord, having the right insurance coverage to help protect your investment is important. Suncorp Landlord Insurance offers coverage for loss or damage to your rental property, including protection against malicious damage caused by tenants, natural disasters, and other risks.
If you are an existing Suncorp Landlord Insurance policyholder, you can renew your policy online. You can also make changes, such as adding or removing coverage.
If you need to make a claim, you can do so online or over the phone. Our claims team is available 24/7 to assist you and provide guidance throughout the claims process.
Insurance issued by AAI Limited ABN 48 005 297 807 trading as Suncorp Insurance. Read the relevant Product Disclosure Statement. The Target Market Determination is also available. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. The information is intended to be of general nature only. Subject to any rights you may have under any law (including the Australian Consumer Law), we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon it. Please make your own enquiries.