What Is Useful Life and Why is it Important for Landlords?
All things on earth have a life expectancy - people, buildings, clothing, food, etc. All the parts of an investment property have a life expectancy as well. A building can last for years, even centuries, while you may have to replace that dishwasher next year or in ten years. Roofs, HVAC systems, water heaters, appliances - all have a life expectancy and while its great to know, it helps when your tenants move out and you need to calculate security deposit refunds, the chart below will come in very handy. Also, how you write off your purchases, time schedules and such will affect your bottom line, so having this information handy is extremely helpful.
Why is it useful to consider life expectancy?
It is always better to know as much about your property as possible. Property owners can do more planning and budgeting if they are aware of the life of different items in their investment property, such as heating units, air-conditioners, various appliances, garage door openers, or water heaters. Knowledge can also help you plan for the unexpected - for example, it may be worthwhile to pay for a 3-5 year warranty than paying for a high maintenance bill when that one-year warranty expires one day after purchase on the new dishwasher.
How can you figure out the life expectancy of an item?
The following is a chart compiled from various Internet sources that generally agree on the life expectancy of various appliances and features in a property. The information below is to provide you with a general idea and the numbers can vary. There is no way to give you an “exact” chart because many factors can affect the life expectancy of your appliances and systems, such as care, maintenance, type, and the number of features.
Average life in Years
Clothes dryer - electric
Clothes dryer - gas
Clothes washer electric
Clothes dryer - electric
Garage door opener
Sit down and create a similar chart for the systems and appliances in your investment property. Other steps can help you with this task.
- When you buy a property, you may not know the exact age of the appliance but you can easily find out the building age and a physical inspection of the appliance can give you some indication of its age.
- Talking with the selling agent or even a former owner can help.
- Take into consideration the condition, care, and history, previous care of the property.
- You can also research the manufacturer of existing appliances or pending purchases online.
- This exercise will at least make you think about the expectations in your current property or you may be considering another investment.
- Add one more column to your chart and list a “replacement price.”
By creating this chart, you are ready when it is necessary to repair or replace a system or appliance in your property. As your property management company, we have years of experience handling appliances and systems. Contact us if you have any questions on your property; we are happy to help you.