Welcome to another insightful episode of the Sutherlands Property Management Group podcast. In this episode, host Adam Bell is joined by Colleen Sutherland to delve deep into the world of budgeting for property maintenance. Let’s uncover the crucial aspects that landlords need to consider to ensure their properties are well-maintained and their investments protected.
Understanding Landlords’ Maintenance Obligations
Colleen kicks off by highlighting the legal obligations that landlords must fulfill under the Tenancy Act. The primary responsibility is to maintain the property in a safe and functional condition. Regular maintenance tasks such as fixing burst taps, addressing electrical issues, and handling general wear and tear are essential components of responsible property ownership.
The Importance of Budgeting Maintenance
The conversation then moves to the importance of budgeting for maintenance. Colleen likens owning a rental property to running a mini business. She emphasises the need to have a well-prepared budget to cover both expected and unexpected maintenance expenses. Given the unpredictable nature of maintenance issues, having a financial cushion ensures that landlords can address problems promptly, minimising potential losses.
Calculating the Maintenance Budget
Colleen advises landlords to allocate a certain amount annually for general maintenance. She suggests setting aside around $1500, considering inflation. For long-term maintenance planning, factors like air conditioners, hot water units, ovens, dishwashers, and other appliances must be taken into account. Colleen draws a parallel to body corporates’ sinking funds and recommends landlords establish a separate account for maintenance purposes.
Preventative Maintenance and Routine Inspections
The hosts discuss the significance of preventative maintenance to mitigate future problems. Routine inspections play a pivotal role in identifying potential issues, like rusty pipes or overhanging branches. Colleen stresses that proactive maintenance is more cost-effective than reactive repairs caused by neglect. Landlords are encouraged to address minor issues before they escalate into expensive repairs.
Upgrading Property Elements
Colleen advises landlords to consider periodic upgrades to maintain the property’s equity. Upgrades like floor and window coverings, as well as electrical appliances, contribute to better property value. During tenant turnover, landlords are encouraged to assess elements like carpet condition and lighting and make necessary updates.
Preparing for Unexpected Expenses
Colleen provides valuable insights into setting aside a budget for unexpected maintenance. She suggests having a contingency fund of $3000 to $5000, allowing landlords to promptly address urgent repairs, such as broken air conditioning units or water leaks. Having such a fund safeguards landlords from compromising their tenants’ comfort and experience.
Dealing with Tenant-Induced Damage
The hosts discuss scenarios where tenant-induced damage exceeds the bond amount. Colleen explains that landlords with quality landlord protection insurance can claim for malicious and accidental damage. Even if landlords need to pay upfront and claim later, insurance coverage helps manage unforeseen financial burdens. The podcast emphasises the importance of maintaining landlord protection insurance for comprehensive coverage.
As the episode draws to a close, Colleen underscores the importance of creating a maintenance schedule and adhering to a prudent budget. Budgeting for maintenance, both regular and unforeseen, is the hallmark of a responsible landlord. Whether it’s preparing for unexpected expenses or planning for periodic upgrades, smart budgeting ensures that your property investment remains prosperous and well-maintained.
For more expert insights and advice on property management, visit Sutherlands Property Management Group’s website and tune in to their weekly podcast releases. Remember, well-planned maintenance today safeguards your property’s value and your investment’s future.
