Maintenance and repair budgeting plays a crucial role in property management, guaranteeing well-maintained properties, satisfied residents, and minimized unexpected expenses. Here, we offer advice on how to plan your budget effectively for the year ahead.
Nevertheless, having a well-prepared plan serves as an excellent starting point, even if adjustments become necessary later on.
Why is a Yearly Budget Necessary?
A well-thought-out budget is essential for property management, whether you are managing residential or commercial properties. It helps you plan and allocate resources effectively. This prevents the need to inform residents that planned works cannot proceed due to budget constraints.
Most property managers adhere to a scheduled maintenance program for the year, which outlines tasks and their respective timelines. This program is vital for preserving the property’s value, ensuring stakeholder satisfaction, and preventing costly unforeseen repairs. Without a comprehensive budget to support this schedule, tasks are likely to remain incomplete, causing stress and dissatisfaction. A thorough budget puts property managers in a strong position to complete all planned tasks successfully.
Emergency Fund
Step one is to establish a healthy emergency fund. This can be used for unexpected repairs so that funds do not need to be pulled away from other planned works. Set that aside first.
Reserve Fund
Many leases allow for a reserve fund to be collected. If there is one in place, this can used to fund large-scale improvements or repairs that are necessary for the safety and value-retention of the property.
Create Your Planned Maintenance Program
We have a handy article all about how to plan annual maintenance, but effectively there should be a list of everything that MUST be done to ensure compliance, safety and to avoid inevitable issues.
Plan tasks out across the year to ensure that critical issues are dealt with at the earliest opportunity, deadlines are met and there are no clashes that may cause significant disruption to residents or staffing issues for you.
We highly recommend using property management software such as Manage Your Block to help diarise the plan, set reminders to request quotes in good time and to track contractor communications and quotes.
Calculate Your Costs
Strive for the highest possible accuracy, but consider allowing a slight overestimation to create a buffer. The costs should be based on costings on current pricing. Labour and material costs from a couple of years ago will significantly differ in 2024, so you may require updated quotes. Always request multiple quotes from reputable contractors and compare pricing and quality.
Once there is an accurate figures for each task in the maintenance program, this will give a better idea of what is doable. Keep in mind that a reserve fund can support large-scale projects, while an emergency fund can address reactive repair needs.
Track Expenses and Stay Informed
As you dive into the year and start ticking things off your list, make sure you keep accurate records of spending costs. A re-adjustment may be needed to your budget as you go along based on current pricing.
You also need to stay up to date with current industry standards, regulations, and best practise. You can then adjust your plan to suit. Keeping your finger on the pulse of new technology is also a priority as you may come across cost-saving measures that would work brilliantly for your block.
Do not create a budget and then forget about it- revisit regularly and adjust if needed. The needs of residents, the local market conditions and regulations can change at the drop of a hat- so being able to keep up is must.
Communication
Great communication and relationship building can save so much stress and money. Informing residents about plans and any changes to them will build confidence and ensure they feel considered throughout the process. This saves stress and time dealing with enquiries and complaints.
Maintaining great relationships with regular contractors can pay off hugely. If you have a long-standing, friendly relationship, quotes, and response times are likely to reflect that.
By implementing these tips and adopting a forward-thinking approach to budgeting for maintenance and repairs, you can enhance property protection, keep residents satisfied, and prevent expensive surprises. Utilising Manage Your Block software makes the whole process easier- from diary reminders to contractor contact details, service charge demand management to document storage.
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