Are you thinking about investing in real estate? Perhaps you envision renting out multi-unit buildings or single-family homes and enjoying passive rental income. While becoming an investor is an excellent decision to build wealth, it also comes with a lot of work (and costs) to operate successful rentals.
Rental income is a nice benefit, but to generate enough returns, investors must understand some of the most significant expenses associated with managing rental homes. Our Philadelphia property management team delivers insights about the biggest expenses landlords face (and how to navigate those costs to boost ROIs effectively)!Ongoing Costs For Philadelphia Rental Properties
A property manager knows that shelling out "extra" money on top of the initial costs to purchase a property can be a surprise to some investors. However, many "extra" costs aren't "extra" at all—they're essential to effectively (and legally) operating rental properties in Philadelphia.
Even if you pay cash-only for a new investment property, a property manager can verify that some of your ongoing operational expenses and fees will include:
- Marketing costs: Owning a rental doesn't mean that tenants magically appeal! Landlords can expect to pay for rental listings, credit checks, background checks, and other marketing strategies to find and screen quality residents.
- Make-ready cleaning and repairs: Whenever a renter moves, rental property owners must clean the unit, repaint it, and exterminate it before it's ready for new tenants.
- Landlord insurance: Standard homeowner insurance policies don't often cover rental homes. You'll need to budget for landlord liability and other types of coverage specific to maintaining and protecting your investment properties.
- Preventive maintenance: Budgeting for routine and preventative maintenance is an essential part of delivering quality Philadelphia rental properties.
- Property taxes: Even if you don't have a mortgage payment, you'll owe annual property taxes as long as you own the rental.
If you're not sure how to estimate these ongoing operating costs, work with a property management company in Philadelphia to analyze your property, budget for costs, and set the ideal rental rate to cover expenses and maximize returns.
What About Bigger Landlord Expenses?
Before you close the book on "all" potential expenses, don't forget about the bigger stuff. Philadelphia rental property owners can't plan for everything, but it's critical to expect things to go wrong.
Unhappy Tenants (and Lawsuits)
Sometimes difficult renters cause enough problems that they serve you with a lawsuit. If a renter gets injured on your property, you might have to deal with a lawsuit related to their injuries. Without the right expert help, landlords can face costly fines, fees, and legal expenses that can impact returns and leave you with an unprofitable investment. Avoiding costly lawsuits or a drawn-out legal process to collect past-due rent or pursue an eviction is easier when partnering with an expert Philadelphia property management team.
Emergency Repairs
Planning and executing preventive maintenance is one of the best ways to reduce repair costs and keep residents safe and happy. However, even with the best-laid plans, sometimes a rental's pipes or roof have a mind of their own and break in the middle of the night.
After-hours repair technicians and sudden, significant maintenance problems are costly. A property management team is an excellent resource to conduct scheduled rental inspections to spot potentially costly issues before they become a problem. Property managers also have on-call contractors who can respond quickly in an emergency—without overcharging for after-hours services.
Rental-Ready Renovations
A property manager knows that most new rentals need renovations to get ready for residents. Appropriate renovations can be pricey without experts to guide you to smart updates that won't bust your budget (or overprice your rental for the market). Working with property management companies can help you avoid making the wrong renovations or paying too much for high-end updates that renters won't want to pay for.
How Do Property Management Companies Save Money for Landlords?
With traditional property management fees, a property owner pays a percentage fee ranging from 8-12% of a rental's monthly rent amount. In many cases, that fee doesn't cover every service a landlord needs to reduce expenses and maximize returns.
However, with Rentwell's OneRate™ plan and our expert property managers, landlords can get everything they need for success without hidden or additional fees for critical services that don't fall under a "property management fee" that covers only a select few services. The right property management company helps real estate investors optimize operations and navigate potentially costly aspects of owning a rental property to reduce costs, manage tenants effectively, and maximize returns!
Reduce Expenses With the Right Philadelphia PA Property Management Company
Before partnering with a Philadelphia property management company, know that they may not include several services you need under the umbrella of their "property management fee." A property manager should deliver every critical service you need for success without tacking on additional fees for each service. For transparent pricing for the expert property management services that successful rental properties need, choose Rentwell and our OneRate™ plan! It's one of the best ways to reduce the biggest expenses that take away from better ROIs.
For more information and help, contact Rentwell today!
