How to Reduce Maintenance Costs in Your Rental

Rental property owners know effective maintenance and repairs are among the most critical factors in keeping a successful rental business going. Without it, the property can lose value, tenants may be dissatisfied, and the business may lack profits. However, maintaining apartments or rental homes can be quite costly. So, it’s important to recognize where you may be overspending and work to cut unnecessary expenses. Today, we’ll review how much you should be spending and how to reduce maintenance costs. 

Contents of This Article: 

• Why Is Rental Property Maintenance So Important?
• How Much Should You Spend on Maintenance?
• How to Reduce Maintenance Costs in Your Rental
• Ensure Routine Maintenance With Property Management

Why Is Rental Property Maintenance So Important?

Rental property maintenance is crucial for several reasons. After all, you wouldn’t want your home to go without necessary repairs or maintenance, and neither do your tenants. Here’s why it’s so important for all property owners and rental property managers in Northern Virginia. 

• Maintain Property Value
• Tenant Satisfaction and Retention
• Legal Compliance

Maintain Property Value

Regular, routine maintenance helps preserve the condition and overall appearance of the property. For instance, you’ll want to address issues like peeling paint, roof leaks, or structural concerns. By actively maintaining the property, you can prevent the escalation of minor issues into major, costly repairs.

Tenant Satisfaction and Retention

Handling maintenance and repairs promptly contributes to a positive living environment for tenants.

After all, when maintenance issues are addressed in a timely manner, tenants are more satisfied with their living conditions. In turn, this increases the likelihood of tenant retention, reducing turnover costs and ensuring a steady stream of rental income. 

Legal Compliance

Landlords are generally legally obligated to maintain their properties in compliance with habitability standards. These standards ensure that the property provides all tenants with a safe and livable environment. Unfortunately, failure to meet these standards can lead to legal consequences, fines, and potential lawsuits. 

How Much Should You Spend on Maintenance?

If you’re reading this article, you probably think you spend too much on maintenance or want to reduce maintenance costs. So, how much should you actually be spending? There are a few ways landlords or property managers can estimate how much they should budget for maintenance. Here are a few basic rules. 

• 1% Rule- Save around 1% of the property’s value for monthly maintenance costs. So, if your property is worth $150,000, save $1,500 per year or around $125 per month for maintenance.
• 50% Rule- Save 50% of the property’s rental income for operating expenses, including maintenance. For instance, if your property brings in $2,000 per month, you’d budget $1,000 per month for all operating expenses, including maintenance and repairs. 
• Square Footage Rule- Save around $1 per square footage of your rental home. For example, if you have a 1,500 square-foot-rental, you’ll want to save around $1,500 per year, or $125 per month, for maintenance costs. 

How to Reduce Maintenance Costs in Your Rental

If you find yourself spending too much on maintenance, you’re not alone. However, most of the time, overspending on maintenance and repairs can be reversed by budgeting and planning. Here are a few simple ways to reduce maintenance costs in your rental properties. 

1. Recognize Where You’re Overspending
2. Plan Ahead and Schedule Maintenance
3. Know When to Repair vs. Replace
4. Negotiate Service Contracts
5. Establish an Emergency Fund

Recognize Where You’re Overspending

First and foremost, you’ll want to recognize where you’re overspending. Are you constantly fixing an old appliance instead of buying a new one? Are you skipping inspections and ending up with costly repair bills every year? These are a few areas that some landlords find themselves overspending on. Review your repair histories and maintenance invoices and track costs associated with property upkeep.

Plan Ahead and Schedule Maintenance

Budgeting and planning ahead for maintenance and repairs is an excellent way to cut back on costs and really see what you’re spending on. It could be as easy as developing a maintenance calendar to plan and execute routine tasks. These may include HVAC system checks, roof inspections, plumbing assessments, and other routine maintenance tasks. Doing so can help spread out costs over time, avoiding the financial strain of dealing with multiple issues simultaneously. 

Know When to Repair vs. Replace

If you find yourself constantly repairing the same things repeatedly, you may want to consider replacing or improving them instead. For instance, if you have an older dishwasher that’s constantly breaking down or needs consistent repairs, the cost of repairing it may be more than replacing it in the long run.

That said, if you’re faced with replacements, consider investing in energy-efficient upgrades. Although the initial costs may be higher, you’re more likely to save on utility bills and reduce maintenance needs. 

Negotiate Service Contracts

Every landlord needs a list of reliable, vetted vendors to call for emergency repairs or routine maintenance. However, hiring someone for each specific task can be quite costly. By entering agreements for regular services like landscaping, pest control, or HVAC maintenance, you may be able to negotiate discounted rates. Additionally, creating partnerships with dependable contractors can help ensure timely inspections and preventative measures, reducing the likelihood of major issues. 

Establish an Emergency Fund

If you spend too much on maintenance or repairs unexpectedly, you may want to start setting aside an emergency fund. That way, when something does come up, you’re not scrambling to pay for it. Having a financial buffer allows you to address urgent maintenance problems without affecting your overall budget. As a result, it gives you peace of mind and ensures you can quickly respond to emergencies or necessary repairs. 

Ensure Routine Maintenance With Property Management

You may think that you’re saving money by managing properties on your own. However, unless you have the time and skills to manage several properties at once, your rental business may quickly suffer. As such, you’re better off leaving property management, including maintenance and repairs, to the professionals. 

Here at Professional Property Management in Northern Virginia, we can help keep your rentals in top-notch shape 24/7. Whether you own one property or 100, our team of reliable property managers can help you find qualified tenants, keep your rentals well-maintained, and collect timely rent payments. Contact PPM today to learn more about our services!