Those property owners and investors who fail to plan for maintenance and repair costs in their budgets will find themselves disappointed in their profits. Not all income that is over and above the actual mortgage payment is profit, you must consider routine maintenance as part of your investment cost. It doesn’t matter how well-maintained a property is, there are always going to be maintenance to keep up the property and repairs when things break, as they inevitably will. Budgeting for these expenses will make them less likely to dip as far into your profits.

Consider maintenance and repair costs prior to actually purchasing the home. All of the budget numbers need to be incorporated into your calculations as you make your investment—including maintenance and repairs. Many investors do not allocate the proper funds for this purpose and only include those costs that are associated with the actual mortgage, insurance and taxes.

Being observant will help you to identify may of the repairs that you may need to do. A huge consideration is the age of the roof. If you can make an estimated guess about when the roof may need to be replaced, then you can plan accordingly. Additionally, all of the main systems of the home should be carefully inspected to estimate their lifespan and guess when you may need to pay for the repairs.

When shopping for property, you should be careful to consider certain factors. The first is the type of property, because this will have an effect on property repair costs. For example, a property with a brick exterior will never require the exterior upkeep that painted siding will.

Secondly, you need to consider the size of the property. Obviously, smaller properties are easier and less expensive to maintain than larger properties. The larger the property, the more expensive things like a new roof, siding or painting will be.

The location of the property will also play a role in the budget for maintenance and repair. Consider how far the property is from where you live, because you will be likely to make many trips during the maintenance or repair stages, which can certainly add up to a huge expense if you are not careful.

Third, decide whether you will be using a manager for the property or if you will be handling the maintenance work and repairs by yourself. When you hire outside help, it will no doubt be more expensive, but it will save you tremendous amounts of time and effort, depending on your skill and experience.

Some problems will arise from time to time that you will not be able to plan for or handle by yourself. Budgeting for these “emergency” types of repairs, such as sewer backup, storm damage, leaks, or appliance breakage is important and variable. To be safe, it is smart to prepare to spend 1-2% annually (based on the property value) for unexpected repairs.

Planning ahead by budgeting for repairs and maintenance issues, you will be better prepared when these things pop up and it will be less of a financial surprise or hardship. For assistance, contact a Michigan property management company.