This month’s article: “Should you manage your own rental property?” – Part II
See the actual costs of our services below.
Many rental property owners possess the necessary skills and personality to efficiently and effectively manage their rental properties, but they have other skills or interests that are more financially rewarding or enjoyable. Or, you may find that a professional property management specialist can run the property more competently than you can.
As a jobholder, look at your annual income and figure out approximately what you earn per hour. Do the same for the cash you save by managing your own property. Unless your management efforts produce significant cash savings compared to your job, you may bet better off hiring a property manager for your rental units. The same guideline holds true even if you are an independent business owner or are self employed. Your schedule may be more flexible than the fixed workday of a 9 to 5 employee. But if you’re earning $50 an hour as a consultant, devoting hours of your productive work time to managing rental units, which may only amount to savings of $20-25 and hour, may not make sense.
One option, maybe to limit the services that you purchase from the management company. Maybe you just need help with the rental of your property and are willing to pay a leasing fee. Or you may want a property manager that charges a fee to cover a specific service.
Management companies accept the responsibility for all operations of the property, including marketing, tenant selection, rent collection, maintenance, and accounting. The right property manager can make a big difference in the cash flow your rental unit generates, because he or she can find good replacement tenants quickly and can make sure that maintenance is done in a timely manner without breaking your budget. You need a property manager who is committed to helping you get the optimum results from your rentals.
Let’s take an example of a property that leases for $1200.00 per month. You have been managing the property yourself but are considering turning it over to a manager. What would the actual cost be to have our company manage your property:
.
$1,159.00 The cost to manage this property until the lease expiration
-$312.93 Tax deduction (Yes, our services are typically tax deductible – your time is not.
-$45.00 Savings Example: Our 3rd Party Plumber: $160, Phone Book Plumber $205, your savings $45
-$55.00 Savings Example: Our 3rd Party A/C Tech: $110, Phone Book A/C Tech: $165, your savings $55
-$75.00 Savings Example: Leak – Repair/Replace/Clean Up, Our 3rd Party: $235, Phone Book Tech: $330
-$600.00 Typically VACANCY is the biggest annual cost to an owner! We will put more $$ in your pocket. We place ads 60 days in advance. On average we have a new tenant in place 15 days after the lease end date of the former tenant. The most expensive mistake owners make when they manage the property themselves is how to handle the end of the lease situation. Most owners place those ads less than 15 days before the tenant vacates (even most property managers only place ads 30 days in advance). If because of this delay, the property is filled 30 days after the lease end date of the former tenant an extra 15 days of rent is lost. How much money does that cost you the owner?
$71.07 Actual cost of our services.
Hours needed to spend to save $71.07
1 hour Mid Lease Walkthrough #1
1 hour Mid Lease Walkthrough #2
1 hour Handling Plumbing Issue
1 hour Handling A/C Issue
2 hours Handling the Leak Issue
2 hours Handling 12 Tenant Payments
1 hour Handling 1 Tenant Payment Issue
2 hours Final Walkthrough
2 hours Security Deposit Claim (Writing the claim/obtaining estimates/handling funds/tenant review)
13 hours Total Hours (Our property managers on average spend about 20 hours per year to manage 1
property. This does not include time spent to locate a tenant)
.
Is it worth basically minimum wage to manage the property yourself?
More importantly, is it worth the liability to manage the property yourself?
Call now us now at 407-641-5049.
Happy Rental Ownership!
Brian P. Goodwin
Director of New Business Development
Orlando Realty & Property Management
708 E. Colonial Dr., #201, Orlando, FL 32803
Office: 407-641-5049 | Fax: 407-429-3857
info@407rentals.com http://www.407rentals.com
http://www.alquileresymanejodepropiedades.com/
Click here for a quick disclaimer.