Real Estate Investing - The True Cost of Deferred Maintenance

Have you ever wondered why some real estate investors can command top dollar for their rental units, while others have trouble just keeping their houses occupied even at discounted rents?

Vacancy rates are affected, to a very large degree, by the condition you keep your property in, both while occupied by a tenant and while seeking a new tenant.

If you keep your property in great condition, you can get your houses occupied quickly, for the highest rental prices and with the best tenants because you will have multiple applicants.

If you keep your property in horrible condition, you can expect the house to sit vacant, and to get low rental rates. You will be forced to accept the worst of the worst tenants... those whom no other landlord will rent to.

When you consider the costs of a month or two of vacancy while finding a tenant, the reduced income from getting lower rental rates and dealing with slow or non-paying tenants, you can see why completing the proper maintenance on your properties is actually a profitable decision and not nearly as expensive as it may, at first, appear.

If you ever wondered whether the low or no maintenance strategy really works over a long period of time, I encourage you to try playing two different games on the Learn To Be Rich investment simulator. In one game, keep your houses well maintained. In the other, defer maintenance as long as possible.

I think you will find the results very interesting both in the game and in real world investing.

Until my next post,

James