My wife and I recently purchased a fixer-upper SFH (looking forward to doing some of the work) and I'm trying to find out what a reasonable maintenance schedule would look like. To start, we have to invest some funds to protect the asset (new eavestroughs, window wells, some electrical work, the foundation walls have to be crack filled), and replace some of the flooring. I'll be getting the quotes shortly for these items.
The house is currently rented at $400 per month and cash flows at about $100. Once these Items are done, I'll be able to raise the rent by $50 (and the tenant is okay with this because they know that I will do this work, unlike their last landlord). Anyhoo....
I know that maintenance is between 10-15% per month, so my question is: What is the best strategy (or your strategy) for allocating the 10%-15%?
Should I try as hard as I can to not spend on the little things (taps, sinks, caulking, supplies, etc), and save for the big things (roof, kitchen cabinets, flooring, appliances)?
Or should I specifically allocate 10% to the bigger items and 5% to the smaller items. What about allocating for emergencies (ie: fridge implodes, furnace dies on Christmas eve and it's -40C in Saskatchewan)?
I've been all over the web, and this forum and in my reference books, but no one seems to cover this fairly essential aspect of the business. I have attempted to make up a budget myself, but whenever I do, it seems that I run out of the reserve maintenance funds and have to seek additional financing to complete some of the work, and I don't want to increase the financing on the building. Any ideas? What do you do?
Thanks in advance, Dave
The house is currently rented at $400 per month and cash flows at about $100. Once these Items are done, I'll be able to raise the rent by $50 (and the tenant is okay with this because they know that I will do this work, unlike their last landlord). Anyhoo....
I know that maintenance is between 10-15% per month, so my question is: What is the best strategy (or your strategy) for allocating the 10%-15%?
Should I try as hard as I can to not spend on the little things (taps, sinks, caulking, supplies, etc), and save for the big things (roof, kitchen cabinets, flooring, appliances)?
Or should I specifically allocate 10% to the bigger items and 5% to the smaller items. What about allocating for emergencies (ie: fridge implodes, furnace dies on Christmas eve and it's -40C in Saskatchewan)?
I've been all over the web, and this forum and in my reference books, but no one seems to cover this fairly essential aspect of the business. I have attempted to make up a budget myself, but whenever I do, it seems that I run out of the reserve maintenance funds and have to seek additional financing to complete some of the work, and I don't want to increase the financing on the building. Any ideas? What do you do?
Thanks in advance, Dave
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