Goliath Sourcing Academy Property Sourcing & Deal Packaging Training

A Quick Guide to Agreeing Maintenance Costs

A common uncertainty in the rent to rent market is what maximum limit to include for monthly maintenance costs. There are lots of different approaches out there and some people will try and keep it at say £50 per month.

At Goliath Property Solutions, we have a fixed maximum of £300 per month. Now you may be wondering why we keep it quite a high. The main reason for this is that when those infrequent problems come up like when a circuit board or a PCB on a boiler need fixing or replacing, the costs are typically going to be between £200-£250. If your maximum limit is £50 then you will then have to go to the landlord for permission and they may ask for up to three different quotes for the work.

This will obviously take up a lot of time and when you already have a contractor who you work regularly with and gives you good rates, this is just a barrier in getting things done. So we go with a limit of £300 per month, which covers those kind of biggish but fairly infrequent maintenance issues.

Another reason we like to get work done quickly is to keep the tenant happy. If we have an irate tenant on the phone every 5 minutes asking when someone is coming out to sort the problem, this again will take up time and effort. It also means that the tenant is more likely to leave the property if they feel they are not being taken care of in that respect.

Really you need to work out what amount you feel comfortable with depending on the cash flow of the property. Find out what amount the buyer of the deal is happy to accept and try and negotiate from there.

About the Author: Mark Dunsmore used to be an estate agent before he learned to apply the same skills to sourcing properties for investors. Having built up a nationwide sourcing business, he’s now teaching other investors how to find their own deals – either to build their portfolio, or make a profit by selling them on to others.
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