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Landlord maintenance costs continue to mount

12 March 2024 1454 Views
Landlord maintenance costs continue to mount

If interest rate rises weren’t enough to drive landlords out the market, mounting maintenance costs could be.

Various studies and surveys have revealed that maintenance, repair and refurbishment work on rental properties is a major concern for property investors.

In one report, over a quarter of landlords struggled with such costs in 2023, citing maintenance requests as the leading cause of trouble, which is four times the number of those who stated changing legislation was the main issue.

Moving forward, three in five continue to be worried about the costs of maintaining their portfolio, according to another survey, and it has become one of the key influencers behind a landlord’s decision to increase rents.

None of this surprises me though, particularly as research from Help Me Fix found that the maintenance costs account for more than a fifth of the average rental income.

Other data analysed the impact of these costs over the average ownership period of a rental property and calculated that landlords could spend over £34,000 on an average of 72 maintenance and repair tasks in nine years.

And although inflation is coming down, materials remain around a third higher than what they were in 2020. Things like screws and insulation material saw the highest price increases in 2023, while plumbing, painting and decorating contractors hikes their costs the most.

Preventative maintenance measures

Landlords have long been advised to put 1% of the property value aside for maintenance costs her year, and there are ways to make sure the expense stays as close to this as possible, or even below it.

  • Quality first

Of course, ensuring work is done to a high standard in the first place will minimise both the number of and cost of repair and maintenance requests.

  • Regular inspections

Ensuring regular inspections are carried out in a timely manner will provide more opportunities to spot potential problems before they become big issues.

  • Effective management

The value of good property management is often underestimated, and simply by servicing tenants better could mean they look after the property well and result in less voids. The latter then leads to fewer tenant changeovers and redecoration, for example.

Maintenance makeover or move on?

What landlords really need to do is sit down and work the numbers of each property. How profitable is it now? What works and improvements need to be made soon and how would the property perform if the unexpected were to happen?

In some cases, landlords will have one or two properties that would probably not warrant the financial investment in maintenance, from both a capital uplift or rental increase perspective.

For example, major heating and hot water system upgrades are potentially inevitable in some properties, but will not impact on the profitability of the property as a buy-to-let on the face of it.

Other properties, however, will be in locations were property prices are generally healthy and if there’s a lot of equity in that property, it might make complete sense to swallow any maintenance costs.

When landlords come to the conclusion though that certain properties are not worth the hassle or investment, there is a stress-free solution.

At Open Property Group, we can help landlords save thousands on overdue and urgent improvements or general upkeep of a rental property.

We guarantee to buy any rental property, as a single unit or as part of a multi-property portfolio, regardless of whether it is in poor condition and requires repairs, refurbishment and upgrades. 

If you want to find out how we can help you avoid mounting maintenance costs by buying your property for cash in a timescale to suit you, get in touch.  

 

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