Successfully investing in Chicago rental property means earning consistent cash flow through rental income and building wealth for the future. There’s a lot of money to be made in the Chicago real estate market, especially with rental units.
However, there are also expenses that need to be planned for when you decide to invest.
If you’re managing on your own, you need a budget for how you’re going to pay for both routine repairs and emergency maintenance. If you’re working with a Chicago property manager, you’ll need to be sure they’re getting good quotes for work that you need done. This will come down to whether they have relationships with the best vendors and contractors in the local area.
Figure out how you’re going to pay for the necessary maintenance and repairs. Surprise expenses are only going to hurt your cash flow.
Chicago Rental Property Maintenance Budget
General industry standards say that you should save between one and three percent of your property’s value for maintenance costs. Every investor knows that those expenses will vary from year to year, and what you spend will often depend on the age and the condition of your investment.
Setting aside a reserve is a good idea because if you don’t use all of what you save in one year, you can just roll it over to the next year. This will allow you to continue building a larger reserve for any surprise expenses or major repairs. When a roof needs to be replaced, you’ll have enough saved to pay for it. This will keep you financially prepared.
Routine Inspections Help with Budgeting
Many Chicago rental properties will require an annual inspection, and we recommend that you have your home inspected as often as possible. This will help you look for deferred and unreported maintenance issues that need attention. It will also tell you what types of large ticket items may be on the horizon. You’ll know when to expect roof repairs, HVAC systems, and new appliances. Routine inspections allow you to budget, and they also protect the condition of your investment.
Preventative Maintenance Must be a Priority
Emergency maintenance issues will always inspire a sense of urgency. When you get a phone call that the water heater is leaking or a tree has fallen through a fence, you take care of the problem right away.
Give the same attention and responsiveness to routine maintenance. Put together a preventative maintenance plan so you can keep everything in good shape. When you’re attentive to small things, you can prevent large disasters and unexpected costs. Seasonal maintenance is especially important in Chicago. We get extreme temperatures, and you don’t want your pipes freezing or your outside water spigot bursting.
Provide a 24-Hour Maintenance Response
At MF Cashflow, we provide a 24/7 maintenance hotline. Your tenants may need to call at 2:00 in the morning, and if you’re managing on your own, you’re going to wonder why those emergencies always come in during the middle of the night. When you work with us, the calls come here.
If a tenant has water coming in through the basement or the sewer is backed up, they’re going to want to get in touch with someone right away. This is super-important. When a tenant calls, someone has to pick up. They want to be heard and listened to. Our team knows how to take these calls and we get the right person out there to fix the problem. This leads to your tenants staying longer. Resolving maintenance problems retains tenants. Make it part of your maintenance plan.
When you want some professional help with maintenance planning and budgeting, contact us at MF Cashflow. We’re here to help you earn more cash flow on your Chicago investment properties.