Maintenance planning: which repairs to do and when
September 1, 2010
Selling in less than one year:
• Do mostly cosmetics.
• Maintenance, other than routine, should be only things that will pay back at least 1.5 to 1
• If property requires capital expenditure, use the proceeds of the sale to pay for it. New roof, for example. That way no out-ofpocket cash and it still increases the basis of the property
Selling 1-5 years
• Most repairs should be things to hold it together. Don’t undertake any major projects of capital expenditures for a property you’re going to sell anyway, unless you can expect a huge payback from it. Assuming there is little deferred maintenance on the property, there should not be too much to spend money on. Roofs, patch them. Make the buyer ask for a new one.
Holding for five years or more
• Do things that will increase the rental value of a property
• Spend what is necessary to repair it to last and so you don’t have to do it again
• Any additions should be predicated on the rental return. Do rent survey to see how much extra square feet, off-street parking, deck, another bedroom, another unit will add.
About the Author: Bob Cain
Some 30 years ago Bob Cain went to a no-money-down seminar and got the notion that owning rental property would be just the best idea there is for making money. He bought some. Trouble was, what he learned at the seminar didn’t tell him how to make money on his rental property. He went looking for help in the form of a magazine or newsletter about the business. He couldn't find any.
Always ready to jump at a great idea, he decided he could put his speaking and writing skills to work and perform a valuable service for other investors who needed more information about property management. So Bob ferreted out the secrets, tricks and techniques of property management wherever he found them; then he passed them along to other landlords.
For over 25 years now, Bob has been publishing information, giving speeches, putting on seminars and workshops, and consulting for landlords on how to buy, rent and manage property more effectively.
