Unexpected repairs are an everyday occurrence in property management, from water leaks to faulty appliances to a collapsed roof, so preparation is key.
To be ready for anything, a maintenance reserve for each rental property is a must.
This dedicated fund serves as a financial safety net, helping investors to smooth out their cash flow and allowing property managers to address both planned and emergency repairs promptly, which is a major contributor to tenant satisfaction.
How much should a landlord set aside for repairs? The reserve amount depends on a few factors, such as the age, size, condition, and location of the property. Peter Lohmann, property management guru and CEO of RL Property Management, sets aside $500 per unit, which is within the range used by other property management businesses. Between $200 and $500 may not cover a major repair entirely, but it can come in handy with smaller ones.
Trusted by landlords, loved by property managers
PayProp makes it easy to manage your rental properties’ maintenance reserves. With owner approval, property managers can direct an agreed-upon portion of the owner’s monthly rental income into a sub-trust account. From there, contractors can be paid out as and when needed, with PayProp automatically topping up the account from the next rent payment. The sub-trust is automatically reconciled along with all your other trust accounts on PayProp for complete certainty that one owner’s funds cannot be used for another owner’s property.
When you’re spending a landlord’s money on their behalf, transparency is the name of the game. With PayProp’s integrated maintenance feature, automated notifications are sent to landlords for all transactions, which they can monitor through the PayProp Owner app along with the status of their reserve accounts.
PayProp comes with a built-in maintenance hub that streamlines maintenance ticketing, invoicing, and payment management. Tenants can submit and monitor tickets that property managers can then handle directly from their PayProp dashboard.
Streamlined maintenance isn’t just a benefit for landlords and tenants: PayProp users also love the convenience of having a centralized location for all their maintenance needs.
“Rather than sticking a Post-it on someone’s desk for the next time she’s in, I’ll just put the note on PayProp and then we can all see it,” says Linda Booth, Managing Director of The Property Booth. “I can see on the tickets who set it up, what the next step is, when we need to follow up, and I can chase up if necessary.”
Better to have and not need
When a property manager is quick and efficient in responding to the unexpected, they earn the trust of their tenants and owners. Maintenance reserves give you the flexibility to arrange repairs at short notice, while quietly safeguarding the value of the properties under your care.