This is something that is commonly overlooked and underestimated. As a landlord, you have an obligation to keep your rental property in good condition for the tenant; not to mention, you want to keep your “investment” in the best condition possible to maximize your return both through rental income and once you decide to sell. I am talking about improvements but I am also referring to the large repairs that must be completed on a home from time-to-time. These repairs include roof, windows, siding, exterior/interior full paint, decking, flooring, lead based paint repairs, and so on and so on. It is imperative to make sure that you put aside funds to cover these repairs. According to www.costhelper.com, here are some estimates on major house repairs:
Do-it-yourself materials to install an asphalt shingle roof on an average one-story ranch-style home (with a gently sloping roof of 1,700-2,100 square feet) can run $680 -$3.700, depending on the quality of the materials. Having the old roofing materials removed and new asphalt shingles professionally installed is about $1,700 -$8,400 on a typical ranch-style home, depending on materials and location.
Expect to pay around $3 -$5 a lineal foot to have someone install vinyl (PVC) gutters, or about $360 -$600 for 120 feet and $750 -$1,250 for 250 feet. Having aluminum gutters installed averages about $4 -$9 a foot plus downspouts at $5 -$8 each, or $500 -$1,200 for 120 feet and $1,050 -$2,400 for 250 feet.
When hiring a painting contractor, paint and supplies make up about 15-25 percent of the cost, while 75-85 percent goes for labor. For exterior painting costs typically average $1,500-$3,000 for an average single-story, three-bedroom home, but easily run $3,000-$5,500 or more for a multi-story or multi-level larger house. For interior painting, expect to pay $200-$400 to have a 12×12-foot room painted by a licensed contractor with brand-name paints; a 15×20-foot room or larger runs $300-$700 or more; and a 1,200-1,500 square foot home is $1,100-$2,000 or more. Having the ceiling painted bumps the cost to the high end of the scale.
Adding central air conditioning to an existing forced-air heating system or installing a new HVAC system in a 2,000-square-foot house averages $3,500 -$4,000, and can be done by two technicians in 2-3 days, with little or no change to the existing ducting.
Keep in mind that with the new EPA laws governing renovation and work completed on a house built prior to 1978 there is a lot more cost involved in making repairs. This cost will be most likely passed on by the contractor to the homeowner. The cash reserve required for your rental property will vary with the style and size of the home. A good rule of thumb is to keep at least 4x the monthly rent in a cash reserve.
Blog Post by John Durham, Marketing/Communications Director, Excalibur Home Management is an Atlanta Property Management Company