A rental property can provide an excellent way to create revenue, but it does come with its fair share of operating costs as well.
Owning a rental property is an investment that can return a high amount of income when it is handled properly, but that doesn’t mean that cash always flows in a positive direction. To manage a rental property, there are several expenses that will come up with some regularity—and as the property owner, these expenses are yours to handle. In this article, we will explore these expenses and what they mean for you.
Understanding Property Expenses
Though a rental can provide solid revenue, there is a level of upkeep associated with the practice. As the property owner, these expenses will be your responsibility, and while your tenants might help with some of them, whether or not you have vacancies in your property, you will be required to pay them. Let’s explore some of the more common expenses that will come up.
Property Taxes
No one likes paying taxes, but it is an important part of contributing to our society. This unavoidable expense will exist whether you own and rent a single-family home—or you run an entire apartment complex. Property taxes can vary significantly from one property to the next and from one year to the next as well. This is an important expense to consider when purchasing a property for rental.
Property Insurance
For a property owner, insurance is one of the biggest priorities. Even though your tenants will likely have their own insurance as part of the agreement, you will still be expected to have your own. This is even more important during periods of vacancy when you are solely responsible. Failing to meet the insurance needs of your property can cause serious problems for you as the owner.
Utilities
Every property needs utilities in order to provide a comfortable and appropriate living experience. This is an expense that is often shared with tenants to a certain extent, but depending on your lease agreement with your renters, you might find that you are still paying a decent portion of the cost. Some utilities might not be included with your renter. In which case, you will be solely responsible.
Maintenance and Landscaping
In order to turn a rental property into a lucrative source of income, you will need to maintain your property well. Properties that are not well-maintained often find themselves with poor reviews and a lack of renters. The way that you maintain your property can also play a role in how much you can reasonably charge for rent. Ensuring that your property stays nice and looks nice is another added expense unless you plan to handle everything yourself. Even then, there will still be material costs.
The Takeaway
The city of Aurora offers a unique opportunity for investors and property owners to meet local needs while making a solid revenue as well. To ensure that your expenses are covered and managed, consider seeking out an Aurora property management company to make the process easier. These talented teams can help you to stay ahead of these expenses as they come up.