Investment Property ManagementMany consumers, particularly as they get older, invest in rental properties and manage these investments themselves. They do this for several reasons. One of the major reasons is to save money and make the rental property more profitable. In most situations this approach works fine and their property is fully rented with great tenants. These same individuals may also do their own repairs and maintenance as well to save money and cut down on costs. Investment property management by consumers works well when you have good tenants. Also if the property is fully rented without many vacancies between tenants. When you end up with bad tenants, there can be a lot of stress associated with dealing with these people.

What Does Investment Property Management Cost

Typically investment property managers will charge anywhere from $10 to $30 a door. The price depends on whether it is a large multi unit building or a single family home. The price varies a lot due to the cost sharing that is available to a large number of units. This fee will include managing the unit, dealing with tenants, collecting rent, paying for miscellaneous repairs and sending the remaining money to the owner. This fee does not include the cost of repairs, the cost of upgrades, tax preparation, utilities while the unit is vacant, advertising fees to rent the unit and many miscellaneous fees.

While this seems excessive, these are the typical rates that investment property managers will charge to manage your unit. Consumers living in the same city can do this work themselves. However when you live in another city from where your rental unit is, one trip to deal with issues can eat up any savings you might have obtained from trying to manage the property yourself.

Managing Repairs and Maintenance

Every home, whether it is a rental unit, an apartment, or a residential home that is being rented out requires annual maintenance. Some owners are very lucky with the tenant doing all of the work and maintaining their property as if it were their own. Others expect the owner to do all of the maintenance. They will not lift a finger even if it would avoid further damage as in a water leak. These are truly problem tenants to have.

Someone must manage these repairs and maintenance. They must hire a repairman to visit the property and make repairs. They must pay these people for their time and for the supplies that might be needed. If the work is inside the home, access must be arranged for at least 24 hours in advance unless it is an emergency. Someone might need to accompany the repair person or at least unlock the door to let them into the home. This all takes time and investment property managers will have staff that you also must pay for to look after these functions for you.

Develop a budget for Your Investment Property

Owners usually lose money on investment properties from an operating cost perspective. They tend to make money when the value of the property increases over time. Some owners do not have much hope of their units increasing in value. They will sometimes severely limit the maintenance and repair activity causing the unit to degrade over time.

This can be a serious problem for the tenant, the investment property manager and the owner. No one is happy. Many investment property managers will simply end their contract to manage a unit due to the ongoing problems. They simply do not want to be associated with a bad property that gives them a bad name. Owners must strike a careful balance between maintaining the property and managing how much money that they spend on the property.

Investment property management is not a simple task. Anyone getting into the business needs to plan carefully. They need to make sure they understand the cash flows, maintenance and repairs required as well as the quality of the tenants.

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