Buy And Hold – High Maintenance Or Low Maintenance > Passive Income
With the buy and hold theory of building your property portfolio you are in for the long term so when purchasing, care needs to be given to purchasing a property that does not require too much in maintenance costs. If you are an extra handy person and have the ability to do proper maintenance relatively cheaply maintenance may not be much of an issue, but the cost of future maintenance should be considered very carefully when purchasing if you are not a handyman.
Keep in mind that the cost of maintenance has to come from somewhere and if it is not covered in your rental income then you will have to pay for it out of your own pocket at the time. Some maintenance can be planned ahead but that is sometimes more easily said than done. Not all repairs can be planned.
What this does mean that if you are purchasing a house in need of repair, the purchase price should reflect the proposed costs and you need to have the money spare at the time of repair.
Another factor to consider is that if purchasing on a buy and hold basis it is better to purchase a property with good tenants in because then you are not putting yourself in a position of having to find tenants and have an empty rental property in the meantime.
When weighing all this up you need to make sure what you are doing fits in with your investment strategy.
With all these different scenarios you can see how you need to have a check list when going out to buy. You most certainly don’t want to overlook any expensive repairs, especially in the near future after purchase.
Filed Under: Investment Strategies • Property Investment Tips
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