Maintenance planning: which repairs to do and when
September 1, 2010
Selling in less than one year:
• Do mostly cosmetics.
• Maintenance, other than routine, should be only things that will pay back at least 1.5 to 1
• If property requires capital expenditure, use the proceeds of the sale to pay for it. New roof, for example. That way no out-ofpocket cash and it still increases the basis of the property
Selling 1-5 years
• Most repairs should be things to hold it together. Don’t undertake any major projects of capital expenditures for a property you’re going to sell anyway, unless you can expect a huge payback from it. Assuming there is little deferred maintenance on the property, there should not be too much to spend money on. Roofs, patch them. Make the buyer ask for a new one.
Holding for five years or more
• Do things that will increase the rental value of a property
• Spend what is necessary to repair it to last and so you don’t have to do it again
• Any additions should be predicated on the rental return. Do rent survey to see how much extra square feet, off-street parking, deck, another bedroom, another unit will add.