What Are Maintenance Expenses?
Let me explain to you what maintenance expenses are: they refer to any cost you or a business incurs to keep assets in good working condition. These include general maintenance like running anti-virus software on computers or repairs such as fixing a car or machinery. Remember, these expenses come on top of the asset's purchase price, so you need to be prepared to cover them to keep everything running smoothly.
Understanding Maintenance Expenses
If you buy an asset, expect to pay maintenance expenses down the line if you want to use it over time. As I mentioned, these costs ensure your assets stay in good order. The amount you pay depends on the asset type and how often you perform upkeep. You might face these for homes, cars, appliances, or electronics, while businesses handle them for vehicles, equipment, facilities, and tech.
Staying on top of regular maintenance keeps costs low because issues get addressed promptly. If you neglect assets and delay service, you'll likely face higher bills. And if you skip maintenance entirely, you might have to replace the asset altogether.
Key Takeaways
- Maintenance expenses are necessary costs for upkeep—whether it's a car, home, rental apartment, or condominium.
- Neglecting regular maintenance—and not paying expenses for upkeep—may result in higher maintenance costs and, even worse, replacement costs for the asset itself.
- Individuals pay for maintenance on things like homes, automobiles, and appliances, while companies pay for upkeep on fixed assets and technology.
Special Considerations
When you purchase an item that needs upkeep, factor in both the initial price and ongoing maintenance expenses. I advise you to set money aside for these costs. If you don't, you could face financial distress when it's time to pay.
Types of Maintenance Expenses
Maintenance expenses vary by asset type. For homes, they include lawn care, plumbing, electrical work, roof repairs, and replacing worn-out appliances. Homeowners also pay hazard insurance premiums to protect against damage from events like storms, fires, tornados, and earthquakes.
Landlords and Tenants
In rental properties, most maintenance expenses fall to the landlord. This covers snow removal, sewage, trash pickup, lawn care, sidewalks, windows, and exterior items. If the place is furnished, the landlord handles furniture repairs or replacements. They also pay for carpet cleaning or replacement, plus painting.
Government regulations mandate that landlords maintain safety and living standards, like ensuring heat meets minimum levels and infrastructure such as heating and ventilation is properly kept. Some upkeep might be the tenant's responsibility—check your rental agreement for what you need to cover.
Condo Fees
If you own a condominium, you'll deal with monthly fees ranging from $50 to $1,000, depending on the property, building, and location. These fees cover amenities like a concierge, pool, tennis courts, or gym.
If you're seeking maintenance-free living, account for these fees when figuring affordability and mortgage payments. For instance, if your mortgage is $1,500 monthly and the condo fee is $600, that fee makes up nearly 30% of your total monthly outlay.
Example of Maintenance Expenses
Take vehicle ownership: it requires regular maintenance like oil changes, tire rotations, and engine flushes. By staying current with these and paying on time, you can keep enjoying your vehicle. If you skip maintenance or wait too long, you'll pay more or might need an auto repair loan. In the worst case, you'll cover the cost of a new vehicle.
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