Hi Guys
Quick questions:
1) In the last 1-3 years (list individually) roughly how much did it cost you per year for repairs and maintenance? (would be great if you put in how old the house is, and type i.e. brick or weatherboard)
2) Average cost you think I should set aside for a fairly old weatherboard house?
The reason why I am asking is I have done some analysis of on-going cost and I've based it on 20% of the rent. This maintenance cost is actually what brings me from a postive cashflow terriorty to slightly negative a year. (after taking into account interest, land lord insurance, rental manager's fees)
Ken
bump
1980's built home, brick ends, hardiplank front and sides, 3 bed 1bath.
R&M costs over four years $2K, $500, $470, $1000.
Place has been undermaintained (ie has lost condition over the 4 years, only emergency work and one improvement projct have been carried out). To bring up to same standard at the start of the eight year rental period would require maybe up to $10K.
So decide – is your R&M budget going to cover bare essentials or are you going to maintain the property at a predetermined standard?
Thanks for your input Shales! Thats not too shabby. except the house I am planning to get is prob 1950 or something ancient and weatherboard to boot. So I should probably expect more huh?
At the end of the day – it is an investment property. I wouldn't be going in and adding a spa, but I also have to make the place marketable and hospitable. So bare essentials I guess.
What would you do?? I've set aside 1500 a year on repairs…
Also I've based 700 bucks a year on utility rates (Gas, Electricity & Water)
Apologies if I am too anal – first IP and am nervous!
My own electricity bill is nearly $1000 a quarter. I don't pay my tenant's electricity bill, only water rates which are a few hundred dollars a year. Local govt rates, landlord's insurance are important things to budget for. Re maintenance costs, I find that you can go a long time without spending any money, then the hot water system will blow up, a light fitting will burn out, an airconditioner will break down and the stove will need replacing all within six months. Tenants don't do any of their own maintenance, so you are likely to need to either pay someone, or do yourself things like cleaning out gutters, and grease traps, replacing locks and door handles, fixing cupboard doors, unblocking drains, fitting new o-ring to the toilet, adjusting the toilet cystern float valve etc etc etc. Then an annual pest inspection / ant/ spider/ cockroach/ silverfish spray will turn up a termite mound in the garden and you'll spend $1500 on a termite control program.
I have never owned a weatherboard house, but I believe they really do need painting on the exterior every so often, to keep the timber protected. Find out from someone what is required here, and budget for it. For our houses, paint is more about cosmetics than protecting the integrity of the building. In fact, our PPOR has that vinyl cladding that looks like weatherboard. It's great. Never needs painting, and you can even buy it insulated.
With an older home, you need to be aware of possibilities like the powerboard needing replacing, wiring needing replacing, how old is HWS? tree and grass root encroachment on drains, and termite protection. If the house is off the gound, get underneath and have a look around. Check integrity of flooring and under floor structures in areas where there may be water damage, such as bathroom, laundry and kitchen.
Good luck
S$1000.00 a quarteR?!?!!? that is massive. besides, I thought as a land lord you only have to pay for the service charges relating to utility (i.e provision of electricty and water and gas, NOT the actual usage as that is chargable to the client)
I guess you have a point about weatherboard houses.. maybe i'll look around for a brick one instead
Hi Ken,
For my 80+ year old wb ip in Melbourne (Brunswick) I have averaged 1 month's gross rent pa for maintenance in the past 5 years. It was in pretty good nick when I brought it, and I manage the property myself, so that helps keep the cash in my pocket.
Cheers,
MikeYeah, $1000 a quarter. Can be a bit less in winter. We live in NW QLD, and it gets pretty hot. We have a fully airconditioned house, elect HWS, elec oven and stove etc, a couple of freezers.
I don't pay any electricity charges at all for my rentals. I do pay the water rates. there is no gas. Maybe the deal varies depending upon where you are.
Our IP is a 1948 weatherboard this year:
Water $500 (we pay this even though we don't have to in Victoria)
Plumb & Elec $370
mirbou staining $550
Misc (new clothesline) $230The previous year is similiar.
So ours works out to 2 months rent a year on repairs
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