Deferred Maintenance Costs Landlords Money

Deferred Maintenance Costs Landlords Money

What is Deferred Maintenance?

The hidden cost of doing nothing

For landlords who defer maintenance long-term, it is like watching the money roll out the door.

Deferred maintenance refers to postponing essential upkeep tasks due to financial difficulties and or inadequate planning. This negligence can significantly affect a property’s condition and value over time, escalating minor repair needs into significant problems.

The widespread occurrence of deferred maintenance in real estate is concerning. Many property owners and managers face the dilemma of addressing immediate issues at the expense of long-term upkeep, resulting in a cycle of deterioration and neglect.

Preventative maintenance saves landlords money. It’s about fixing things before they break, worsen, or cause more damage.

Costs Increase Exponentially

This short video gives examples of how costs can increase exponentially.

1️⃣ Decreased Property Value

Deferred maintenance can lead to a noticeable decline in the property’s overall condition.

Issues such as peeling paint, leaky roofs, or outdated systems make a property less appealing to potential renters and decrease its market value. When it comes time to sell, properties in poor condition typically fetch lower prices, reducing potential profits for landlords.

2️⃣ Delaying Maintenance Increases The Costs

Minor issues not promptly addressed can escalate into major problems that are much more expensive. For example, an ignored small water leak can lead to significant water damage, mould growth, and structural issues. The cost of repairing extensive damage is often exponentially higher than addressing the problem when it first arises.

3️⃣ Tenant Turnover and Vacancy Rates

Happy tenants are more likely to stay longer and take better care of the property, reducing the costs associated with turnover and vacancies. Deferred Maintenance Costs Landlords Money

Regular maintenance signals tenants that the landlord cares about the property and their well-being, fostering a positive landlord-tenant relationship. Conversely, neglecting maintenance can lead to dissatisfaction, complaints, and a higher likelihood of tenants moving out.

Properties that are not well-maintained are less attractive to high-quality tenants, leading to higher vacancy rates and increased tenant turnover. Frequent turnover not only means more time and money spent on marketing the property and screening new tenants but also leads to lost rental income when the property is vacant.

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