Continuing from my previous blog post on landlord maintenance costs (How Much I’ve Spent On Maintenance Costs Over The Years As A landlord) I’m going to quickly ramble on about how I try to minimize maintenance costs (real exciting stuff, brace yourself for mental ejaculation). I think this may be an area where a lot of landlords get it wrong. I’ve witnessed Landlords buy the wrong property, recruit the wrong tenants, and consequently pay out of their arse to keep the boat floating. When really, all they needed was a bit of common sense and foresight to avoid those issues.
I consider forecasting maintenance costs pretty important; it helps give an indication of whether an investment is worth pursuing. Before buying, I always try to work out how much contingency I’d need for maintenance. Obviously, it’s not always an accurate calculation, but the figures can often stack up and fit in line, which is great for forecasting net profit.
As far as I’m concerned, there are a few factors which can help forecast how much annual maintenance costs will be. Here’s how I break it down:
1) Type of tenants
I’ve had tenants in the past that enjoyed putting holes in the wall, draw on the walls and wipe shit on the carpets. They weren’t the cheapest tenants in the world.
Good/sober tenants = lower maintenance costs.
2) Type of property
New build properties generally aren’t as well built as older Victorian houses, so they’re probably more prone to injury.
A lot of these new build properties have plasterboard partition walls, which can fold in half when you take a frustrated swipe at the wall after a bad day.
3) Age of property
Older properties are more likely to suffer from plumbing/electrical faults, unless they’ve been completely refitted.
There’s definitely an element of luck involved. You could have an overall sound property, but some times karma fails to surface.
5) Quality of fittings
If you walk into a property with cheap fittings, it will probably end up costing you. I learnt this the hard way. I had a property that initially came with a shitty boiler, and it kept breaking down as different parts kept failing. I’m sure a lot of you already know boilers aren’t cheap. I’m still waiting for it to completely break down on me.
In hindsight, instead of continually patching up the rusty tin, it would have been better just to replace the entire boiler with a much more reliable model.
6) Custom fittings
A lot of new build properties have been crammed into small areas, consequently lot of custom fittings, such as kitchen units and white goods have been installed. They’re custom because they’re a lot smaller than the standard sizes you’ll find in D.I.Y stores. So when it comes to replacing/repairing these items, it may cost more.
Ways to prevent rocketing maintenance costs
Putting aside the element of bad luck, I try to you can try to minimize maintenance costs by doing the following:
1) Picking the right tenants
2) Getting the appropriate property survey before purchasing a property
3) Getting a qualified plumber/electrician to check the property thoroughly before/after purchasing
4) Use quality fittings as opposed to the cheap and cheerful crap. I know, I know, we all love Ikea.
5) Build relationships with qualified labourers that know what they are doing. Good labourers will provide warranty for the work they do and the products they use.
6) buy products with warranties, and even pay a little extra to lengthen the period of the warranties
Does anyone bother thinking about maintenance costs before taking action, or is it considered secondary bullshit that is only thought about when something actually needs fixing/replacing?