So you don’t like math. We understand. Many of us here at Nationwide Property Values don’t as well. We’d rather target the next innovation for home selling, social media, and tackle it with gusto. That’s a whole ‘nother ballgame, though. Cost estimations are still the cream of the crop, the standard, in figuring out what your rental property expenditures are. But get ready for probably the most agonizing part of cost estimations:
Maintenance Costs: the Devil’s in the Details
Many gurus, even, will underestimate this amount for maintenance costs. Why? It’s typically the hardest to estimate, because quite frankly you can’t predict the future. You don’t know if the devil’s going to cause your roof to collapse. Here’s the general rule, though, when figuring out your maintenance costs —
They need to be 1% of the property value each year. Make a note of that. 1%. When you figure that percentage for your maintenance costs, that should cover anything that could happen. The devil’s a sneaky beast there, making bad things happen, but you’re on the ball covering the financial bases.
When you break down, say, a piece of property valued at $150K, for instance, you’ll be looking at maintenance costs of $1.5K annually. That’s $125 a month. Who knows: you might come out one month without having to spend a dime of that percentage in maintenance costs. Good. If not, though, you have a good enough cushion for maintenance costs to sidestep disaster easily, allowing you to have a “No Work Wednesday” from time to time, breathing easier as the revenue continues to roll in.
You Shall Overcome!
Not to be too religious here with all the devil imagery, but let’s face it: disaster costs money. And we can never be perfectly prepared for the worst to come. With what you learn here when factoring in maintenance costs, though, you’ll at least survive and perhaps come out on top every single time mishaps occur. Thank God.