What is your annual maintenance budget?

Just doing the pre-purchase figures on potential IPs, and I have no idea how much to budget for maintenance costs. I know it depends on the age of the place and the size.

For example what might it be for a 2 bed villa 10 years old?
Compared to a 3 bed house 20 years old?

What sort of things make maintenance costs go up a lot (building materials, etc)?

(I did try to search this but I can't search the word 'maintenance'! Is anyone else frustrated by this limitation to the search function?!)

Thanks, would appreciate any advice/examples/links to similar threads....
 
(I did try to search this but I can't search the word 'maintenance'! Is anyone else frustrated by this limitation to the search function?!)
Use google.
At the google search: site:somersoft.com "maintenance"

In answer to your Q, there are threads on this. I allow about $1K per IP across out portfolio. Some use none - some use $2K - averages out over the year.
 
Think about what things are likely to break and average life spans.
EG a gas instant hws would last 15 - 18 years, cost to install $1000, so if you allow on average $1000/15 that is $66.
Replace carpets every ... ten years maybe? Or more often? Say whole house $4000? That is $400 per year? Not sure on pricings there. How old are the carpets you have?
What else gets replaced? Maybe taps, paint, mulch ... Add on one blocked toilet a year ($80). Gutter clean $120. Service aircon. Gutters replacement every ten years or maybe fifteen? Retic problems?
So I would think maybe $1200 a year, maybe a bit more, but it will vary, and some years the hot water system will go and the vinyl in the kitchen will need replacing and the gutters (probably all in the same month).
Hosues may be slightly more but only a bit, they still have a toilet, hws, taps; just allowing a little more for the replacement of floorcoverings really.
 
You should probably allow for 0.5% of the property value towards any type of expenses per year not only for maintenance but body corp, land tax, council rates, water and related.

You can get some softwares to keep track of all of your expenses so you can forecast it more acuratly.
 
You should probably allow for 0.5% of the property value towards any type of expenses per year not only for maintenance but body corp, land tax, council rates, water and related.

0.5% ?? I'd have thought at least 1%...

My experience from my first IP of cost $290K, for my first year just gone I've spent roughly:

Council Rates $1000
Maintenance $500
Water $400
Insurance $600
Agents Fees $900

Even if you took out the agents fees if you self manage, it's almost 1% and I'm sure there's a few other bits and pieces I've forgotten. I'd rather allow more than not enough.

As far as maintenance budget, I'd go with Propertunity said, and allow $1,000 a year average. I've only had to spend $500 this year, but I didn't have something major blow up like a HWS, air conditioner etc.
 
Fair enough, it sure can be more, I meant "at least" 0.5% but I didnt write that.

We do the PM ourselves and dont pay more than $220 for the insurance (basic landlord cover with Whitbread insurance brokers, cant remember the insurer name)
 
We do the PM ourselves and dont pay more than $220 for the insurance (basic landlord cover with Whitbread insurance brokers, cant remember the insurer name)

My insurance includes building insurance, of which I pressume you'd have body corporate fees instead.
 
I was using $500.

I'll list so far what i've spent on properties

IP1 - $398.20
IP2 - $489.00 (This is about to increase dammit lol)
IP3 - $234.40 (Only rented since Nov 09)

So i think $600-700 per prop per yr for myself would be a good guideline

Issues IP 1 - Dishwasher and electrical
Issues IP 2 - Plumbing and Locks
Issues IP 3 - Electrical

All my places are over 20yrs old and brick construction

IP1 - Lowest yield
IP2 - Highest
IP3 - Middle

The highest yielding IP has seemed to have the most maintenance issues
 
Needing a new hot water system will blow that budget right out of the water. Storage systems tend to die after 8-10 years, instant 15 - 18 ... and if they die you will need to replace it straight away, tenants really dont like cold showers!!!
 
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