You are here

Investment property management: The price of maintenance

Do you know what percentage of your net rental income goes to maintenance?

Don’t worry, it’s not a test, but it’s surprising how many property owners we talk to every day that are unprepared for maintenance costs. I bet you know how much to set aside for the tax accountant, the council rates and even your car registration, but how flexible is your budget for any potentially unexpected investment property maintenance costs?

Thankfully one of the advantages of building or buying a brand new investment property from a reputable builder is you manage to minimise maintenance costs for a number of years, but you can’t avoid them altogether.

Here is a rough expense matrix for an average 3-4 bedroom home on a 12 month lease cycle. 

ItemFrequencyEstimated $
Internal painting7 years$2,500
Hot water service (replace)7 year$1,300
Carpet (replace)5 year$2,000
Window coverings (replace)5 years$2,000
Gas heaters (service)2 years$100
Garage door (fix/service)2 years$200
Electrician call out2 years$100
Plumber call out1 year$200
Handyman1 year$150
Air conditioners (service)1 year$250
Gutters (cleaning)1 year$150
Window cleaning1 year$300
RCD & Smoke Alarm tests 1 year$100
GardenerQuarterly$100

This works out to $3,100 per year over a 7 year period.

Which means if rental yield is 5% on a $500,000 house, maintenance costs 12% of gross rental receipts every year.

Maintenance is a critical part of investment property management, but it pays to think about outgoings in advance, not just at tax time when your accountant stirs up the painful memories with a handful of receipts! Maintenance costs for investment properties can be claimed at tax time, however it always pays to be prepared.

If you need any assistance calculating or budgeting for investment property management and maintenance costs, contact your ABN Realty Property Manager on (08) 9200 7200 or email pm1@abnrealty.com.au