I am relocating but don’t want to sell in this market. So I am planning to rent my single-family detached home. What are the options to rent? Should I do this myself or hire a company? Property management fees seem a little high. They charge anywhere from 10-12% of rentals + 1 month finder’s fee. Plus I will have to pay income tax on my rental income. Just need some help to help me think this through. Any help, suggestions would be appreciated. Thanks.
By: Surjit T
About the Author:
By: Surjit T
About the Author:
June 3rd, 2009 at 4:46 am
Kansieo.com
If you are not going to be there in person to manage it, you will need to have a professional. They are well worth the fee, although the 1 month finder’s fee is steep. I pay just a flat 10% on rents received, plus I pay for advertising and maintenance items. But I live 2 states away, and could never do it alone! If you have a mortgage, you will be fortunate if your rents cover the mortgage payment, so income tax on the income it is probably not a big issue. Finding the right person is the trick – a good property manager is priceless – a lousy one is worthless!
June 3rd, 2009 at 3:56 pm
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I agree with the other poster. Interview a couple of property managers and investigate the fee structure a little. Practices vary in different areas – mine charges the 1st months rent plus 5%, but it is priceless. They do a thorough screening and I have never had a problem with tenants. Your fee is paying for advertising, screening, handling all the tenants problems, and arranging maintenance first then billing you later.
Since the rent won’t cover your mortgage you’ll have a nice tax write off. Your expenses will probably more than offset the income.
You can write off depreciation, all the management fees, travel to the area to inspect your property.
June 7th, 2009 at 12:28 am
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There a a lady in my office who owns rental property in our town who still pays the monthly management fee because she does not want to deal with tenants, period. As long distance landlord, it is going to be more challenging to manage the property, bear that in mind. Unless you have friends or family in the area reliable enough to take this on, you may find the PM fees to be money well spent.