Kathy's Blog

Maintenance Tips to Save You Money

How can regular and inexpensive preventive maintenance on your investment property save you money and make the difference, in losing or gaining thousands of dollars over the life of the investment?

Which type of investment property do you have?
Of the hundreds of properties I have been through I have noticed two distinct types, one where upon entering you can see that no one has loved the property.  Last week I went through a house that was approximately 40 years old and had not had any maintenance  in what appeared its whole life.   Yes, there are those properties out there.

The other types are those properties of a similar age that are immaculate, the guttering is clean and the paintwork is in great condition.  Sometimes the kitchen might be original but it looks new because it is so well kept.  These properties often have an original bathroom that is also clean and mould free.

Bargain hunter or home buyer?
From a purchasing point, unloved properties attract bargain hunters and investors who want to “steal” the property and do it up. By comparison, the well presented property is going to attract a home buyer and more likely achieve a high sale price.

Good properties attract good tenants
The same applies for tenanting the property. I have seen properties in appalling condition that are tenanted. There are tenants that will rent these properties, however, the rental income is low due to the poor condition. On the other hand, properties that are in a good condition and well maintained are rented at premium rates – these properties attract a different type of tenant, who is prepared to pay the higher rate, for a well maintained property.

What does it mean to carry out preventive maintenance?
It is very similar to owning a car; the manufacturer gives a guide as to what intervals services need to be done. If done at these intervals the car will give years of hassle free driving, and a higher resale price.

If you apply the same concept to both your home and investment properties it can save you expensive repair bills over the time you own the property. You can also charge a higher rental and attract a good tenant, and finally, when you do come to sell in the long term you could attract homebuyers who often are happy to pay market value and sometimes more if they fall in love with the property.

What, grass in the gutters...it gets worse?
One thing that I have repeatedly seen is the cleaning of the spouting. I often joke when I see a property that has grass growing in the gutters, and say that it will be difficult to mow at that height!

On a serious note, having gutters clogged up can lead to a few issues. Most importantly, the water that should go down the spouting is going to be building up and going into or onto the wall. This becomes very serious if it is a cavity wall, as internal rot of the framing will occur, until it’s too late.

This can be a very expensive repair as the lining may have to be removed, the damaged area repaired (re-framed), re-lined, plastered, and painted, not to mention any electrical damage that may have occurred.

Negligence could be an insurance nightmare
In one case I saw recently, a double storey townhouse had a large Oak tree growing very close to the roof line, and the gutters were blocked with fallen leaves, and as high as 30cm in some places. I later heard that due to the weight of the gutter, it had collapsed, and the insurance company refused to pay out, as they saw it as the owner’s negligence.

Prevention could save you dollars
Looking after an investment property in terms of preventive maintenance can result in good rental income, prevent costly repairs, and achieving a good sale price in the long term. preventive maintenance does not need to be a costly exercise, if planned and carried out early.

One of the best times to invest in property is when the market is suppressed. Do you have your financed arranged and are you in a position to purchase, or are you looking to refinance your existing investments. In my blog next month, I will talk about applying for lending on investment property within the current market. Also find out what the banks are lending and what they are lending on.

For further information you might like to visit a website that covers the 6 key areas of preventive maintenance. http://www.maintaintoprofit.co.nz/index.php?id=14.

Kathy Engelbrecht

http://www.houses4you.co.nz/

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