Having a realistic understanding of ongoing operational costs of your property while it is being rented is critical when calculating investment property ROI (return on investment.) While the tenant will pay the mortgage and typically the utilities (trash, water, electricity, etc.), other expenses will be your responsibility. These include:
Property management fees
HOA fees (if applicable)
Landscaping (if applicable)
Capital expenditures (bigger renovations, additions, etc.)
Vacancy costs (this is typically calculated as a percentage and factored into your projected expenses as a conservative oversight, in case the home sits empty between tenants)
Choosing a property management company like Southern Coast Management will help you determine monthly rental income that includes covering these expenses.
How to select a property management company?
Research reviews online
Ask your realtor, lender
Ask for referrals from others who own rentals
Our best advice to investment property homeowners: Always overestimate the amount it will cost to renovate a property, underestimate the rental income you will earn, and overestimate the expenses you will have to pay. Then, when you blow it out of the water, you’ll have a big smile on your face and feel confident in your investment! Contact Southern Coast Management to help guide you through the process.