Budgeting For Maintenance

Budgeting for Maintenance

Some Owners use a multiple of monthly rent (5%-8% is common) as a budget guideline for maintenance.  For instance, if the rent is $1,000 per month, you would keep $50-$80 in reserve to pay for potential emergency repairs that are required by state law.  Alternately, some owners use a percentage of the property value such as 2%-3%.  If you adopt this strategy, and if your rental’s value is $100,000, you would keep $2,000-$3,000 in reserve. Whatever strategy you adopt, the important issue is that you have maintenance (for one-time or recurring issues such as landscape) and repair funds calculated into your budget that will assist in maintaining and increasing your property investment value.

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