3 Main Costs for Your Rental Property

If asked to choose the top 3 costs for a rental property, different owners may have different answers. For me, they are leasing fee, make-ready expense and eviction costs.

1. Leasing fee.

For new owners, leasing fees are out of your pocket to cover the PM company or real estate agent’s costs. it is for the efforts including attracting prospectives, scheduling showings, vetting applications. The cost is normally a full month rent. For some areas and some companies, it may be 50% or 75%. in general, don’t expect cash flow in starting the 2nd month.

2. Make Ready Expense

Before you get a tenant or in between two leases, there are expenses to fix somethings about the property. Most common expenses include painting, repair and maintenance, and cleaning. Painting is not only for an area. it is normally corner to corner. Thus remember to budget for it.

3. Eviction Costs

Eviction may not be that often but when it happens, it normally comes with a huge expense and headache for the owner. As stated in the first point, vetting the tenant is really necessary and it worth the costs to pay some professionals to handle it. When eviction happens, costs to the owner include rent lose, attorney expenses and any potential damage expense.

Many people choose to be a rental property owner for the passive income and certain kind of lifestyle people described to them. However, it is necessary to get to analyze those kinds of expense that may incur and the potential headache comes with it. Seeing both sides can help you make a well-thought-out decision.