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    6 Replies Latest reply on Feb 14, 2008 2:03 PM by verse2101

    What are the maintenance costs for a rental property?

    Mozart Wayfarer

      I'm thinking about investing in a small piece of property to rent out and eventually cash out in a few years. I have the cash to invest, but I lack the know-how to manage it. For example, if my tenant has any problems - such as electricity, plumbing, etc. I wouldn't know how to fix it myself. How much do you have to factor in for maintenance costs? Also, what's the cost difference if I hire a property management company to deal with those issues vs. hire individual specialists as the need arise? Any other benefits with engaging with a property management company? Or is that mainly reserved for a portfolio of investments vs. one property?
        • Re: What are the maintenance costs for a rental property?
          BDS INC Adventurer
          Mozart -

          Hire yourself a good property management firm. You can do a search in the yellow pages in your local area. A property management firm can do a number of things for you including - renting your property, running credit checks and background checks on potential tenants, grounds maintainance, and repairs. Some firms charge a monthly fee no matter how many services you use. Typically you'd build the property management fee into the rental charge. Their are other companies that charge you a individual fee per service and you only pay for what you use.

          Hiring individual specialist may be cheaper for some things but in the long run if your "thing" isn't daily care for your property, a property management firm that is looking out for everything is a good choice. There are plenty of property management companies that will look after just one house.
          • Re: What are the maintenance costs for a rental property?
            SCORE17 Wayfarer
            A rule of thumb to factor in is $0.20 per square foot per year for a property in good condition for capital expenditures. Management fees will probably be somewhere around 5% of your rents again depending on the size and condition of the property, more important is their responsiveness, I would suggest finding a few small apartment buildings that you think are run well and finding out who manages them.
            • Re: What are the maintenance costs for a rental property?
              Mozart Wayfarer
              Thanks BDS INC and SCORE17 that was extremely helpful advice. Now, I can consider rental properties as a possibility now that I better information on the total costs of being a landlord. I appreciate you taking the time to share you expertise.
              • Re: What are the maintenance costs for a rental property?
                WEBillions Adventurer
                If you decide not to have a property manager, think about whether being a landlord is for you.

                My parents were in the landlord business my whole childhood and it was really a headache for them and therefore me. There are at least two possible (and in my experience likely and potentially frequent) annoyances you'll have to deal with. The first is things breaking, potentially when you are about to go on vacation or sometime when you really don't have time to deal with it. Without a manager, you'll have to either fix it yourself (you said you weren't very handy) or hire someone else. That can be expensive. The other is dealing with people not being able to pay the rent. Could you really kick a mother of three who just lost her job out if she can't pay? Probably not for a while, but how long would you let it go on? Believe it or not, it's actually a fairly common experience for people to try to disappear without paying and they can be difficult to find unless you are willing to pay a lot for someone else to find them. Apartment building would be better since there are lots of people and on average this won't happen. But, then you definitely need someone to manage.

                Good luck.
                • Re: What are the maintenance costs for a rental property?
                  verse2101 Wayfarer
                  Get a set of Books from each dept. at home depot and read. In chicago matenance cost run $20,000 per apartment if gutted if not do as lttle as possible. Make it livable.
                  Chris