THE VALUE OF RENOVATIONS AND MAINTENANCE
Over the years, we have come across two types of landlords that take it to the extreme.
The first is the ‘slumlord’, who doesn’t want to spend any money on maintenance.
The second is the ‘reckless renovator’, who overspends on doing unneeded renovations.
We prefer a more pragmatic approach. This means making sure the property is maintained to a safe and habitable standard – without it costing the earth.
BENEFITS OF A WELL MAINTAINED PROPERTY
According to Nathan, by keeping your investment properties well maintained, you will be more likely to:
– Attract and retain good tenants,
– Ensure you receive the optimal amount of weekly rent,
– Keep long-term repair costs down,
– Not be liable for injury due to shoddy repair work or an unmaintained property.
NATHAN’S APPROACH TO MAINTENANCE
When you have many properties, it pays to be as efficient as possible with maintenance.
Nathan likens his properties to hamburgers at MacDonald’s.
Although the fast-food chain sells different types of burgers, they use the same patty and pickles for each one.
Nathan tries to use the same colour paint and same type of carpet in all of his properties.
This keeps costs to a minimum and simplifies the process of maintaining so many different properties.
THINGS TO REMEMBER
1) You don’t need to carpet your properties just because you prefer carpet. Your tenants may actually prefer a tiled floor.
2) Colour preference is very subjective. Painting walls and ceilings in a neutral tone is the best way to please everybody – it is unlikely you will get a tenant who complains that they don’t like cream coloured walls.
3) A nice kitchen can attract good tenants, but it doesn’t have to be top of the line with stone island benchtops and European appliances.
QUESTIONS TO ASK BEFORE COMMISSIONING MAINTENANCE WORK
– Why am I doing this repair and how will it help me push forward?
– Will doing this repair or renovation make me more money? What will the return be?
– Will this repair or maintenance stop me from losing money? Will it prevent me from being sued and can the tenant rely on the job being done to a safe and habitable standard?
CONSEQUENCES OF NOT DOING PROPER MAINTENANCE
Not keeping your investment properties properly maintained will cost you more money in the long run.
– It will be harder to find and keep tenants,
– It will affect the amount of rent you receive,
– It will cost you more in repairs down the track,
– It may affect your revaluations when you want to tap into equity.
FIVE LAWS OF SUCCESSFUL PROPERTY MAINTENANCE
1) Keep your properties well maintained.
2) Don’t spend too much and avoid doing renovations that aren’t needed.
3) Do the minimum but make sure it is up to standard – this will protect both your tenant and you.
4) Shitty properties will attract shitty tenants….even if they are in a nice suburb.
5) A well maintained property means it will be cheaper to repair in the long run.
Has a tenant ever requested maintenance work that you deemed over the top? A larger bath, perhaps, or a better model oven?
Please share your experiences in the comments section below.