How much should I budget for maintenance in Chattanooga?
Alex Smith here from gkhouses, Chattanooga, with another installment of Questions Owners Ask. Today’s question is “How much should I budget for maintenance in Chattanooga?”
Owners often overlook this aspect of owning a rental house, but it is vital for any due diligence process.
Two Types of Maintenance to Budget For
The first type to budget for is the smaller ticket repairs. These are repairs like replacing a fuse or a doorknob that doesn’t lock.
For small repairs like these, the rule of thumb is saving 1% of the value of the house per year.
For example, if your house is worth $150,000, you will set aside $1,500 per year to cover those smaller repairs.
Next, you should budget for the bigger items that occur in much less frequency but that are necessary to prepare for.
These items are the more capital expenditures like replacing the roof, repaving the driveway, or anything that will add value to the house.
We recommend saving 5-8% of your gross rent every month for this type of repair.
The point behind monthly budgeting is so that when any repair is needed you will not as shocked by the cost.
Repairs are inevitable, and it will give you more of a piece of mind if you already have money set aside for them.
Unfortunately, there’s no hard and fast rule for budgeting for maintenance expenses. These are simply suggestions.
Maintenance needs vary wildly depending on the house’s location. A California house will need very different repairs than one in Florida.
Other factors to keep in mind is the house’s age and history. What kind of significant repairs were needed in the past?
If you have any other questions, feel free to reach out. I would love to talk to you and answer any questions you might have.