Should You Focus on Newer Homes for Low Maintenance?

Many clients prefer newer homes (built in 2010 and later) due to concerns about maintenance costs. However, some of our highest-performing properties were built in the 1990s, as shown in the map below. Limiting the focus to only newer homes could result in missing out on excellent properties.

Here are some considerations regarding the maintenance cost of our recommended properties.

• Maintenance costs on all the properties we recommend are low, typically less than $500/Yr for base maintenance. This is partly due to the materials required to survive the Mojave Desert. See the illustration below.

• Another factor contributing to our low maintenance costs is that we have eliminated subdivisions with high maintenance expenses. We (usually) do not recommend properties built before 1990 except for five subdivisions built between 1985 and 1989.
• Based on our experiences, if a home built before 2010 is properly updated, for example, with the right paint, flooring, countertops, etc., the maintenance costs will be about the same as those built after 2010.
• The major cost items are the HVAC and the water heater. The cost to replace an entire HVAC is typically between $6,000 and $9,000. I am aware of replacing only 2 HVAC systems in the 500+ properties our clients purchased from us. A 40-gallon water heater typically costs about $1,000 to replace, and water heaters typically last 12 to 15 years.

Maintenance costs are not the critical factor for profitability. What matters is attracting and retaining the right tenants. This requires buying properties that reliable tenants are willing and able to rent.