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As a rental property owner, staying on top of repairs and routine maintenance is essential to keeping your property in good condition and your residents satisfied. While repairs address unexpected issues that arise, routine maintenance helps prevent larger problems from developing. Understanding the differences between the two—and knowing what is expected of you as a landlord—will help you manage costs, maintain a safe and habitable space for your residents, and protect your investment. In this article, we'll explore what’s typically included in rental property repairs and maintenance, how to budget for these expenses, and tips for finding reliable contractors to handle the work.
What’s Included in Rental Property Repairs and Maintenance?
Throughout the life of your rental property, you will deal with repairs and routine maintenance. While they sound similar, repairs address specific issues that arise unexpectedly, while maintenance involves routine upkeep to prevent larger problems from occurring. As a landlord, you have legal obligations to maintain your property, ensuring it meets health and safety standards. It’s also in your best interest to address repairs quickly and thoroughly as residents are likely to rate their rental experience with you much more positively if you do.
Examples of Common Repairs:
Plumbing issues such as clogged drains or malfunctioning garbage disposals
Electrical problems such as malfunctioning outlets or switches
Appliance repairs such as broken dishwashers or dryers
Lock and key issues including lost keys that require the unit to be rekeyed
Examples of Routine Maintenance:
HVAC system maintenance, which consists of regular cleaning and replacement of air filters, seasonal inspection of heating and cooling systems, and ensuring all moving parts are in working order
Gutter and roof maintenance, which includes cleaning of gutters and downspouts, inspecting the roof for damage, and clearing debris from roof valleys to ensure proper drainage
Landscaping and lawn care, which can include mowing, edging, and trimming lawn areas, pruning trees and shrubs, and weed control
Depending on your rental agreement, residents may be responsible for some of these common types of repairs or maintenance, while the responsibility may fall on you as the landlord to address the others. It’s important to be clear about what repairs and maintenance are the resident’s responsibility and how they should go about requesting help. And remember, this list is just a start. The full list is long so it’s best to plan and be prepared for any scenario!
How Much to Save For Repairs and Maintenance
One of the biggest pitfalls for investors and landlords is underestimating the costs of repairs and maintenance—or neglecting to save for them altogether. Without adequate savings, you might find yourself unable to address issues when they arise, leaving you with difficult decisions and potentially costly consequences. Setting aside a portion of your cash flow each month can help you avoid these challenges and protect your investment in the long run. While it’s impossible to predict maintenance costs with absolute certainty, there are several effective strategies to help you estimate and plan for these expenses.
Let’s explore some of the most commonly used methods.
The 1% Rule
A common guideline is to save 1% of the property's value annually for maintenance. To make this manageable, divide the amount across your monthly income. For instance, if your home is valued at $200,000, you should budget approximately $2,000 per year for maintenance, which breaks down to about $166 per month.
The 10% Rule
Another common guideline for budgeting maintenance costs is the 10% rule. This rule suggests setting aside 10% of your total monthly home expenses for maintenance. Here’s an example of how to calculate it:
- Mortgage: $1,600 (10% of $1,600 = $160)
- Taxes: $360 (10% of $360 = $36)
- Insurance: $250 (10% of $250 = $25)
By following the 10% rule, you would save $160 + $36 + $25 each month, totaling $221. This method helps ensure you have a consistent budget for ongoing maintenance needs.
The Square Footage Rule
The Square Footage Rule suggests saving $1 per square foot of your property each year for maintenance. For example, if your property is 2,000 square feet, you should budget $2,000 annually for upkeep.
It’s important to note that these three rules are only estimates. Maintenance and repair costs can vary significantly from property to property. However, these guidelines can help landlords and investors plan and budget effectively, reducing the risk of unexpected out-of-pocket expenses. Additionally, service costs can vary, as some professionals charge more than others for the same tasks.
Setting Up a Repairs and Maintenance Budget
After you have decided on a saving strategy, we recommend creating a repairs and maintenance budget. Start by assessing the current condition of your rental property and taking note of all routine maintenance tasks and possible repairs you can foresee. For example, if the dishwasher in your rental property is on the older side and there is the possibility it breaks during a resident’s lease, budget for this repair to prevent getting caught off guard.
Use the list below that highlights many of the necessary routine maintenance tasks when assessing your rental property and prepare a budget that covers each of these areas:
Exterior Maintenance
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Inspect and clean gutters, downspouts, and roof
Inspect and repair fences, gates, and outdoor structures
Inspect and clean HVAC units
Inspect and repair exterior lighting/electrical
Inspect and repair hazardous cracks or damage in sidewalks, porches, or patios
Inspect and clean the fireplace and chimney
Inspect and repair damaged, loose, or missing siding or trim
Interior Maintenance
Test and service the HVAC system
Test and service all smoke detectors and carbon monoxide detectors
Inspect and clean exhaust fans
Test and service the furnace
Landscaping and Lawn Care
Prune trees and shrubs before growing season begins
Test and service sprinkler system before use
Prepare landscaping for winter by mulching and pruning
Regular mowing, fertilizing, and aerating
Creating a Contingency Fund
Now that you’re armed with a saving strategy and a tailored budget, it’s time to set up a contingency fund to handle unforeseen repair expenses. Once you have created an informed budget, you can determine the size of your contingency fund and start regularly contributing to it.
The reason you should set up a separate contingency fund rather than mingle this money with your personal funds is because it’s best to treat this money as untouchable, and not dip into it for non-essential expenses. In this way, you have a solid safety net should a costly repair pop up or multiple routine maintenance services come due at one time. You never want to be caught unprepared and without enough money to cover these necessary expenses or you can risk not just the profitability of your property but also the health and wellbeing of your residents.
Tracking and Monitoring Expenses
Once you have a resident in place and repair and maintenance expenses start to occur, it’s essential to implement a tracking system so you can review and refine your budget. Whether it’s through spreadsheets or property management software, you should diligently record all expenses and regularly review your budget to identify any areas where adjustments may be needed. With each lease term, your budget will become increasingly accurate and can turn into an invaluable tool for ensuring profitability.
Legal and Tax Considerations
When budgeting for repairs and maintenance at rental properties, you as a landlord need to consider both the legal and tax implications.
Legally, you are obligated to maintain your property so it remains in a habitable condition, adhering to local housing codes and regulations. Failure to fulfill these obligations can lead to fines, legal disputes, or even eviction lawsuits. Certain repairs may also be required by law, such as addressing health and safety hazards. It’s best practice to consult with a legal professional to understand all of your responsibilities as a landlord.
From a tax perspective, you can often deduct repair and maintenance expenses as operating expenses, reducing your taxable income. However, it’s essential to distinguish between repairs (deductible) and improvements (capitalized and depreciated), as well as to keep detailed records of all expenses for tax reporting purposes. Consulting with a tax professional or real estate attorney can give you valuable guidance in navigating legal and tax considerations effectively.
Annual Maintenance Schedule
Budgeting and saving for repairs and maintenance is just one part of the equation. Equally important—and often more daunting—is keeping track of what needs to be done to your property and when.
This is where an annual maintenance schedule becomes invaluable. A maintenance schedule allows you to establish a routine for proactively maintaining your rental property. Instead of constantly wondering what to repair and when, you simply follow the plan. This approach makes it much easier to address wear and tear before it escalates into costly problems.
Below are several essential tasks to include in your annual property maintenance schedule.
Windows
Look for window damage on framing, glass, fixtures, and caulking, and ensure they are clean and function well. That includes repairing or replacing screens if necessary. Here are a few benefits to keeping your windows in top shape:
Functioning windows are less likely to incur damage. residents are less likely to force a window open or closed if the fixture is clean and functioning properly. Ensure that windows glide open and glide closed during your annual property inspection. Check lock fixtures on each window and replace any damaged parts.
Deep clean windows to set high resident expectations. Grooves and ledges, along with the frame and glass, make windows some of the dustiest and dirtiest places on a property. Include window cleaning in your maintenance checklist to ensure no insect bodies, leaf debris, cobwebs, or grime are stuck in the tracks or on the frame.
Clean windows increase appeal for new residents. Show off the landscaping and views with clean glass and screen inserts.
Exterior Surfaces
Long-term dirt accumulation on exterior surfaces can erode exterior finishes and hamper property appreciation. Regular power washing is another task to add to your list to ensure your property maintains or even increases in value. Areas like driveways, walkways, concrete walls/patios, and some decks may be pressure washed to quickly and thoroughly remove accumulating dirt and debris. DIY landlords can rent pressure washers by the hour from their local hardware store once a year to refresh a property’s exterior. Low-touch rental property investors may prefer to hire a contractor to provide this service.
Siding/Roof and Gutters
Damaged roofs and siding can cause leaks that annoy residents in the short term, and lead to major repairs in the long term. Inspect your roof and ensure shingles, soffits, and exterior vents and fixtures are in order and not visibly damaged. Don’t forget to inspect your gutters while at the same time. Plant material and debris can clog them, leading to water damage inside and outside the home. Weeds can even grow in your spouting if left long enough. This causes water to pool, which can run down the side of your house and flood the ground near the foundation. Such issues can create serious and expensive problems later, such as:
Gutter rusting and degradation
Internal leaks and damage within the roof cavity
Damage to the property’s facade
Landscaping erosion
Sinking foundations
We recommend cleaning your rental property’s gutters every year. Certain areas, such as those with lots of trees or overgrowth, can benefit from more frequent cleanings.
Lawn and Yard
Develop an annual lawn and yard maintenance plan. Even if your residents are accountable for lawn and yard maintenance, there are some aspects you might have to handle. For instance, you have to cut down the following:
Small trees
Intrusive limbs
Hanging overhead branches (they can damage shingles or create other hazards)
Conducting regular lawn maintenance every year helps you identify any damaged limbs and trees that could fall. This is also a good opportunity to assess the status of your landscaping elements including perennial flowers, bushes, shrubs, paved pathways, or garden beds. If landscaping elements have degraded over time, consider replanting decorative garden beds during the turn to increase curb appeal and perceived rental value.
Heating and Cooling
Regularly evaluate your property’s heating and cooling equipment to ensure they function properly without issues. Change air filters annually and schedule HVAC technician visits as needed for additional servicing and maintenance. Failure of small components in cooling units can produce excessive carbon monoxide and may create major airflow problems. Annual maintenance visits will allow you to notice all these potential equipment failures — avoiding costly and catastrophic emergencies.
Water Heater
It’s a good rule of thumb to flush your water heaters at least once a year to maintain water cleanliness, especially if they’re heavily used. You should include this in the annual maintenance schedule, at your desired frequency. Failure to flush the water heaters can cause them to deteriorate or malfunction. They may leak or even flood your basement. A handy landlord can sluice the hot water heater in a single quick visit with a garden hose on a warm day. Or hire a professional plumber to sluice the hot water heater as a part of additional maintenance or inspection. They will advise on operating the equipment, flushing recommendations, and sediment buildup.
Pest Control
If your property is located in a rural area or among several trees, it can potentially become a haven for rodents and pests. Some rodent and pest threats include:
Mice building nests in the walls
Raccoons creating openings in the attic
Squirrels hiding in the garage
All that said, properties in suburban and urban areas can also fall victim to pests. These issues can become intrusive to residents, damage electrical wires, ruin insulation, and block airflow. To reduce rental property expenses and keep pests at bay, consider scheduling annual maintenance checks and calling a pest professional.
Plumbing
Plumbing issues can escalate into costly emergencies, whether your property is old or new. Older homes may have outdated plumbing or poor sewer systems, while newer properties are not immune to potential problems.
To avoid expensive repairs, schedule annual maintenance checks and sewer cleaning with trusted professionals. You can also request the installation of capital guards to prevent debris from clogging the system.
During these visits, professionals can:
Inspect key areas, including sewer lines.
Detect small leaks or pooling water that may lead to mold or flow issues.
Replace worn components like shower grout, garbage disposals, or toilet wax rings.
These routine, low-cost measures can prevent significant damage as your property ages.
Cracks and Fissures
Repairing plaster cracks might seem like a cosmetic issue, but addressing them promptly can prevent more significant damage down the road. Small cracks are easy to fix, but if left unattended, they can grow into larger, costlier problems.
For instance, a new ceiling crack could signal a serious structural issue, such as a risk of the floor above collapsing. Even well-built properties can develop minor cracks over time due to the natural settling and weight of the building.
To ensure peace of mind, consider hiring a professional to assess and patch cracks or fissures. Regular inspections can help identify underlying issues and protect your property from further damage.
Fireplace and Chimney
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If your rental property has a fireplace, hiring a professional chimney sweeper is essential. A clogged chimney can pose a serious fire hazard, and the masonry components may deteriorate over time, requiring prompt repair.
It's best to avoid letting residents use the fireplace until it has been inspected and, if necessary, thoroughly cleaned by an expert. Taking these precautions helps ensure safety and prevents costly damage to your property.
Other Safety Checks
Here are some additional safety checks you need to add to your annual checklist:
Check smoke and carbon monoxide detectors yearly
Replace the loose and deteriorating boards on decks, patios, and steps
Check if door sensors are operational and if they retract upon obstruction
Check that doors have proper locks and sufficient unlocking mechanisms
Make sure that all windows are functional and have secure locking mechanisms
Verify that on-premises fire extinguishers function correctly
Don’t Forget Inspections
Landlords should perform regular inspections on top of repairs and maintenance. This can help landlords document their property’s condition, catch future fixes early, and detect potential lease violations. Some rental property inspections you might add to your routine include:
Routine inspections
How to Find a Great Contractor
It can be tempting to choose a contractor with the lowest price but keep in mind that you often get what you pay for. While there are certainly great, affordable contractors out there, lower prices can sometimes indicate lower-quality work. This can lead to recurring issues with the same repairs, costing you more in the long run.
Investing in a skilled, experienced contractor may cost more upfront but can save you money by reducing the need for frequent fixes. In this section, we'll explore key factors to consider when selecting a contractor. While none of these factors alone guarantee high-quality work, the more of them that align, the more likely you are to find a reputable professional.
Hire Licensed and Insured Professionals
Many states and localities require contractors to be licensed, but not all do. Even if licensure is not mandatory in your area, it signals that the contractor has invested in their education and training to provide high-quality work. It can also indicate a lower likelihood of dishonest or unprofessional behavior.
In addition to licensure, hiring an insured contractor is crucial for protecting yourself. If an uninsured contractor is injured while working on your property, they may be able to sue you for compensation. An insured contractor, however, will be covered by their insurance policy in case of injury.
Contractor insurance can also protect you if the contractor causes damage to your property, installs something incorrectly, or causes harm to others on your property. While licensed and insured contractors may charge more than unlicensed, uninsured ones, the added peace of mind often makes the extra cost worthwhile.
Ask for Past Work Examples
Good contractors are open about their work. Ask to see examples of past projects to gauge their quality. Look for signs of high-quality materials and craftsmanship, and ensure the projects are similar to your needs. If their portfolio doesn’t include relevant work, they may not be the right fit for your project.
Check References/Recommendations
Request at least three references from any contractor you're seriously considering. References provide insight into a contractor’s work habits, timeliness, communication, and other important factors. When contacting a reference, ensure the project is similar to yours. While recommendations from other landlords with similar properties are helpful, it's important to check additional references as well.
Read Online Reviews
Online reviews are a great way to start and verify other factors. A high number of positive reviews indicates the contractor is well-known, reliable, and provides a good experience. You can find reviews on platforms like:
Google Reviews
Build Longterm Partnerships
Finding a good contractor takes time and effort, and great contractors are in high demand. If you don’t build rapport early, they may seek work elsewhere. Developing a strong relationship from the start ensures they’ll want to partner with you long-term.
Final Thoughts: Your Guide to Maintenance and Repairs for Rental Properties
Managing repairs and maintenance is a critical aspect of being a successful rental property owner. By understanding the difference between repairs and routine maintenance, budgeting appropriately, and setting aside funds for unexpected expenses, you can keep your property in top shape and provide a positive living experience for your residents. Regular inspections, a solid maintenance schedule, and having reliable contractors at your disposal will also help prevent costly issues down the line. With proactive planning and diligent upkeep, you’ll protect both your investment and the well-being of your residents for the long term.
If you're looking to reduce stress and maximize profits with the help of an experienced property management company, Evernest is here for you. We assist landlords nationwide in navigating the complexities of property maintenance, ensuring both confidence and financial stability. Let us help you achieve the same success!
