Quote:
Originally Posted by Xist
I found a property rental management company up here that charges 10%. I had read they usually charged 8-12% plus fees, so that was better than I expected.
If we rent out this house hopefully that would be enough to buy a house in the Mesa area.
|
From this cryptic post it sounds like:
1. You have been accepted to an in-person grad program in Mesa, Arizona
2. The whole family is moving to Mesa
3. You are thinking of renting the house in Show Low and buying another house in Mesa.
Am I correct? If so - congrats.
My property manager charges 10% of rent on a normal month and 50% of the first month's rent. If the house turns over in less than 6 months there isn't another 50% to find a replacement renter.
However, you have to be careful with how much income you expect from the rental. Our properties rent for $1400 a month so the gross rent should be $16,800 a year but in 3 years we have owned it we have only brought in an average of $6500 a year after expenses and we don't even have a mortgage on the property and we have had it rented about 90% of the time.
You have the 10% off the top for the management company. You still have to pay property taxes. You will also have to pay income taxes on any profit you make because you are now a business. Then there is insurance on the property and liability insurance that covers you if the renter or someone else tries to sue you. You will also have some months it isn't rented and you will have to pay the utilities for those months.
You will also have to have a cash buffer on hand because if something breaks you are legally required to fix it in a short period of time (check your local laws), you are going to pay to have the work done, and you can't wait to shop for sales. For example the refrigerator in my rental broke earlier this month and that was $900 out of pocket to get a new one in the unit within 48 hours.