As a general rule, property management teams say that owners should set aside 50% of rental income to cover the expenses of a rental property.
As with any property, a rental property will have several expenses that you need to take care of. These are incredibly important as you need to make sure everything is ok for the tenants that are renting your property.
For a rundown of 5 typical rental property expenses that you need to be aware of, keep reading.
1. Property Management
Managing properties is no small task, so in most cases, you’ll want to hire a property manager to take care of this. They’ll typically charge about 8%-12% of the gross rental income of a property. While this is quite a significant expense, it’s often worth it.
A property manager will handle a range of tasks such as rent collection, managing repairs, and responding to tenants. They’ll also make sure Federal Fair Housing rules and state landlord-tenant laws are followed.
2. Maintenance and Cleaning
Rental property maintenance is essential to make sure everything stays working and meets any necessary standards. Things will break with time, so you’ll need to pay for repairs every so often.
When you’re getting new tenants in, you need to make sure they’re moving into a place that has been professionally cleaned. At Orchard Cleaning Services we offer a range of options for this. Our Rental Make-Ready clean, for example, is ideal in this situation.
3. Advertising and Marketing
When looking for tenants you’ll need to market your property to some degree. You can use websites like Rent.com and Apartment Finder to display your investment property so that plenty of potential tenants will see it.
On top of advertising, you can pay for a tenant screening service so that you can find your ideal tenants. You can sometimes charge the screening cost to the prospective tenants, but this may limit the number of people who are interested in your property.
4. Leasing Commissions
You might pay a real estate agent or your property manager an additional fee for finding a new tenant. This will typically cost the same as half a month to a full month’s rent.
If a tenant is renewing, some property managers will charge a half-month of rent renewal fee, but others might do this at no charge. You should look into this before settling on a property manager as it may affect your decision.
Dealing With Rental Property Expenses
When renting a property you need to make sure you’re prepared to handle various rental property expenses. You’ll need to pay property managers to handle day-to-day operations and find tenants, and there will be fees for things like advertising, maintenance, leasing commissions, and more.
When prospective tenants are viewing your property you need to make sure it looks good. Orchard Cleaning Services can make sure your property looks brand new, perfect for anyone who’s thinking about moving in. To find out more about our services click here to contact us today.