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