Share this post
While trolling the internet for interesting topics to include in my monthly newsletter, I came across an article on repairs vs. improvements. Depending on what style of investor you are, you may be more prone to one than the other.
A repair is necessary for something to continue functioning. If your property is professionally managed then this is something your Property Manager would inform you needs to be done. In some cases if a needed repair is not completed in a timely matter it can cause further damage. Repairs can be time sensitive and need to be taken seriously. An improvement is more of an optional expense. This might be something suggested by your Property Manager to increase the value and possible income for your unit. An improvement can be anything from new paint and flooring, to adding on a garage. Anything you can do that will make your property more appealing to a prospective tenant or buyer.
In a rental property, simply adding a new coat of paint and new flooring can increase your monthly rent amount by an average of $200. Along with the extra income, having a rental property that is in good shape can sometimes change the “class” of tenants you might find. The tenant looking for a place they can be proud to call home might take better care of your property than the tenant who is just looking for whatever is cheap.
There are many aspects to consider when deciding which direction you would like to go in with your property. All of which are researchable online or can be discussed with a professional. To read the article that got me started on this topic, please go to http://landlords.about.com/od/TaxTips/a/Improvements-Vs-Repairs.htm