Hi everyone! I'm doing some research for an upcoming venture, so I've got some questions for you pertaining to maintenance on buy and hold and cash flow properties. Understanding of course that some of the answers will vary by region, I'm looking to average the answers, so to speak.
1) How much do you spend per year (in dollars not percentages) for ongoing maintenance such as caulking, reglazing windows, replacing wind blown shingles, repairing loose siding or trim, loose door hinges, tightening loose railings, etc?
2) How much time do you spend per year inspecting your properties and interacting with contractors (including searching for them)?
3) How much does it cost you for make readies? On this one we'll use 600 sq ft as a base for multifamily, and 1000 sq ft for a 2/1 SFR.
4) How much do you pay per door for rekeys?
5) What services other than the aforementioned do you spend entirely too much time, effort and money on that could be handled by someone else?
I'll have more questions in a couple days, but I want to keep discussions somewhat focused. Thank you in advance, and happy deal hunting!
1) My costs range $100-500/unit/year for maintenance, but the average is close to $350. Normally not the kinds of things you list, it is for fixing appliances or plumbing, correcting things we see in inspections, upgrade to whisper fan if they aren't ventilating the bathroom, etc. I also spend $100-300/unit/year on the multi's for landscaping (mowing and trimming)
2) Maintenance inspection takes me about 30 minutes per unit, I have a checklist I go down. The time is in scheduling the visits. We do more inspections when they first move in, reduce it to a year, then reduce to every 8 months if we are comfortable with how they care for the unit. Hiring contractors to do needed work can take some time too, but difficult to quantify, and more of a factor with turnover/rehab.
3) Average turnover cost is about $1500 to get unit rent ready. We've had some as low as $100, and a few $3,000-$4,000. This includes getting them out, removing belongings, and fixing the unit (flooring, paint, appliances, window coverings, etc).
4) Minimal, $35 lock set each time, and begin rotating when inventory gets larger enough. We've only had to have a locksmith out once, and invested in lock cutters for locks on storage units.
5) No complaints, the more you do it the more efficient you get at it.
Hope this provides some info. I'm sure costs and experiences vary greatly.
We bought a 1970s era building and rehabbed each unit as turnover occurred. We are a husband/wife team with minimal rehab skills until we started this journey in 2013. Rehabs typically included new paint, new flooring, repair rotted bathroom subfloors, new toilet, new tub/shower surrounds, new appliances where needed and repainting kitchen cabinets when needed (some of our units had newer cabinets) and new window coverings. We do our own painting and flooring, hanging towel bars, light fixtures, and do demo/hauling work ourselves. We bought 8 $35 locksets (all the same brand) for our 6 unit building, and simply switch out locks and deadbolts ourselves, letting the old lock "rest" in the storage shed for 1-2 turns before being brought back into use. We hire out the bathroom remodels and kitchen appliances are replaced on as needed basis. We typically spend $3,000-5,000 on unit remodels. Our building pays for it's own upgrades. Remodels have gotten more expensive in the past 5 years due to increased labor costs and we are proactively replacing water heaters and older appliances since we are into "low hassle" landlording and can afford it. Four out of 6 units have been remodeled, as we have elderly long term tenants in the 2 un-remodeled units. The remodeled units are fast and cheap to turnover as we have Allure floors and standardized paint that can be retouched. Ongoing maintenance has been minimal in the remodeled units. We spend an estimated $700 a year on sprinkler system blowouts/turn on, lawn spraying and yearly spraying for carpenter ants in the spring. My husband mows the property weekly. Property taxes are by far our biggest single expense.
If you are considering buying an older building be forewarned that resident complaints will be coming out the woodwork. We were initially inundated with appliance related complaints once the residents realized they had a LL who would actually fix things. The first 6-8 months of owning this building were very busy, so be sure to budget extra $$$ and allow for extra time spent with repair people.
Kind of a VERY broad question..
What should you have in reserve to cover expenses might be another way to look at it.
Size building is what makes or breaks that,, it you personally are able to do any of the work or is your idea of ownership is to farm it all out..
My family owned 3 builidings,, 5 plex, 6 plex, 4plex.. We did it all.. everything excepts roofs, and major plumbing,, and major electrical, the rest we did it all, our own court evictions, our own showing, our own mowing, and shoveling the snow.. and turn cleaning, and painting, and we paid ourselves a management fee each month.. our buildings were paid all clear..so after taxes, utilities, insurance, and our management fees for instance on the 4 plex we cleared about 50%.. a year.. roughly 15K on the one property,,
I much rather have had all the work going into one property than spread all over the place and had had a 14 unit building or 18 unit building..
size matters I'd really probably never personally invest in anything smaller that a 12 to 18 unit building, the property taxes,, and utilities, and insurance are what eats you up.