W
hen you have the right maintenance people / companies in your property investment team , renovations will not be expensive . Additionally , renovations should not be expensive if you do not let the condition of your properties worsen over time . But whatever you do , do not do renovations or maintenance yourself ! ( Unless you are a good handyman who can do a proper job .)
I ’ m a firm believer of doing minor renovations on my units , and here ’ s why :
• It is a great mechanism to increase the value or perceived value of a property
• If a property looks good , you can increase the rent , and
• It is a fantastic way to decrease the vacancy of a unit , i . e ., sourcing a tenant faster and having fewer months where the property will be vacant .
Property maintenance is an expense that you need to work into your financial model and budget . My rule of thumb is to spend one month ’ s rent on maintenance per year . Having a property maintenance plan , which includes your maintenance budget , will save you a lot of stress and costs .
If you are Considering Doing Renovations , I Would Suggest Starting on One of the Following 4 Categories :
1
General Maintenance
This is the general wear and tear of a property and small handyman tasks that you need to do in a rental unit . It covers a wide range of tasks from replacing door handles or locks to cupboards that are not closing properly , etc .
An ideal time to do general maintenance on a unit is when you have just bought the property and have not yet sourced a tenant or when a tenant has moved out , and the next tenant has not moved in yet .
2
Electrical
These tasks can range from electrical problems with the lights or plugs to stove or oven issues . An electrician should do any electrical maintenance tasks as some maintenance tasks could result in electrical hazards . And we don ’ t want that !
3
Plumbing
When you have a property portfolio , you will have plumbing issues at some point . You need a good plumber on your investment team who will give you excellent service and charge you a reasonable price . Plumbing maintenance tasks can range from a leaking toilet to leaking taps or issues with the shower .
4
Improvements
Improvements are a separate category to general maintenance as there are times after you have acquired
SA Real Estate Investor Magazine OCT 2021 31