How to Budget for Maintenance on a Rental Property
There are several different ways to calculate expenses but in most cases they all end up with approximately the same amount of money spent on maintenance annually.
At R&R we use the 1% Rule
This is pretty easy and straightforward. All of your maintenance costs should be around 1% of the value of your property. For example, if your rental property is valued at $180,000, the landlord should project about $1,800 just for maintenance. That comes roughly to $150 per month. However, there are some exceptions, and this formula doesn’t apply to all types of properties.
For example, you’ve bought an old piece of real estate property that hasn’t been maintained for years. For the first year, you might need to invest way more than just 1% of its total cost.