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The Hidden Costs of Being Cheap on Maintenance

As an investor, you want to make sure your bottom line is getting you what of your investement. Maximizing revenue and reducing costs are obviously key, but what happens when you decide to fix something "cheap" or even defer the maintenance? Let's examine the hidden costs.

First of all, it's important to understand the full costs of owning an investment for the long-term. Many investors these days are looking for short term savings and returns which can cause issues in the down the line. Let's look at the example below:

Both properties are approaching renewal with the resident. Property A has been diligent and timely with making repairs and keeping the resident happy. Their maintenance costs were more than property B, but the resident has decided to renew their lease instead of move out like property B. Property B now has a 2 month vacancy (10 months of rental income), and has additional expenses with a full month's lease, make ready costs, etc. The Net Income at the end of the year is almost 40% less!

In conclusion, when investing in necessary repairs and maintenance upfront, owners can avoid more long-term problems and ensure that their rental property remains in good condition for years to come. This investment also helps to attract and retain high-quality residents, which is essential for the long-term success of any rental property.


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