Should property investors spend on ‘preemptive maintenance’?

The secret? “Spending a little bit of money … to make more money,” according to Steve.

Should the property investor decide to put any of the five properties, or even the whole block, on the open market, the buyer’s agent believes that they will be able to recoup all the dollars that they have spent—from purchase costs down to the cost of implementing the exit strategy.

Be proactive

Before renting out the properties, Phil made sure to do all necessary checks, repairs, and maintenance in order to provide a livable space for his tenants. As unique as this asset is, the simple trick to making it work lies in the continuous upkeep of the houses on the block.

Steve explained: “The trick to this type of property, because there … [are] five units and there is no strata fund or sinking fund and admin[stration] fund, [the problem] is that the upkeep on this needs to be taken care of. It's not something that you need to be reactive to—you need to be a little bit proactive.”

"That means maybe getting the lawns mowed every week in summer, and having the plumber go out there … A bit of preemptive maintenance goes a long way,” he added.

According to Phil, it is a property investor’s responsibility not just to his tenants but more so to himself to make sure that his investment properties are always in its best shape.

“I'd prefer to spend $1 now than having to spend $3 in the future for the same issue, right?” he said.

Aside from getting a property manager to help in the management of schedules and contractors, it’s also best to keep in touch with the rest of your financial team in order to incorporate maintenance in your overall investment strategy.

Steve said: “I'd probably get stuff done now … that preemptive maintenance. Then, I suppose, psychologically, tuck away X amount per quarter ... for that repairs and maintenance now.”

“Obviously, we've got building insurance—that's part of the budget—[as well as] landlord insurance … Certainly, you're going to have grounds maintenance ... plumbing maintenance [and the like] ... [It’s all] part of property ownership,” the buyer’s agent concluded.

Tune in to Phil Tarrant’s portfolio update on The Smart Property Investment Show to know more about the benefits of buying in bulk, how it benefits his portfolio, and the opportunities it will bring as a hub for economic growth and development.