Saturday, September 8, 2007

M is for Maintenance

Here is a loaded term for a car guy. Maintenance. We do it for our rides, and just about nothing can stand in the way. I've known guys that bordered on religious about changing their own oil. I've seen them pull into a rest area along the interstate, slide under the car and change their oil. A quick refill and clean-up, and they were on their way again. We would never think of leaving something undone.

Houses aren't much different. They need regular maintenance. They don't need oil changes, but they need those air filters changed pretty regularly. Painting, pressure washing, and caulking are all maintenance items to be checked off. There are scores of other things as well. Not only that, but one of the most efficient ways to keep a house up is to take care of anything that pops up. And to take care of it quickly and properly. When things are left undone, or poorly dealt with, the deeper the problems will become. Foreclosures and REO (bank owned properties) are usually the worst about maintenance. When people can't afford their house payment, they generally aren't spending time and money painting or keeping the septic healthy.

When resale time comes around, things can be a little more complicated. Sellers start looking at the payback for the money spent. In some cases, they think that there should be an increase in value for every dollar spent on anything. But, that isn't always the case, and maintenance is one of those times. The flip side is that failure to spend money can detract from the value... and cost money. There is a significant difference between increase and decrease in value (seems obvious enough), but many fail to realize the difference. Let me outline it here.

Generally, when we are talking about property value with a seller or other interested person, we are assuming that the property is reasonably maintained. If there are obvious deficiencies, or the property is visibly rundown, that will probably factor in to the value, but those little things (which do add up will probably get glossed over). But, if the property isn't reasonably well maintained, that expected value starts to slip. If major issues are dealt with, that were previously factored in to the value, it may bump up. But, don't expect that the roof that went on last month costing $15,000 is going to add $15,000 to the value, especially if the previous roof was serviceable. It will make the house more attractive, though.

Finally, buyers notice maintenance. If a house looks great, but the details aren't kept up with, the buyers will wonder what hidden issues there might be. If a house seems to have a tremendous amount of maintenance performed just before listing, the buyers will wonder if there are underlying problems that the sellers might be trying to camouflage.

Just like with our vehicles, don't let it fall behind the maintenance schedule, and there will be fewer issues, and it will be more natural to buyers. The house will also cost less to maintain than it will to repair.

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