People often are concerned about property management fees and whether they can save money and increase their return by managing their own property. Using one simple assumption, this would save $1200 per year on a $150,000 investment or 0.8% (a tiny cost for any asset management). So they decide to manage their own property
A few reasons why this is not a good idea:
1) The fees paid are covered if the property increases in value by an additional 1%. Having a property professionally managed will add this amount
2) To properly manage a property with inspections, lease signings, screening tenants, answering all maintenance calls, advertising and showing property the amount of time an owner spends will be extensive. Let a professional manager complete this for you
3) All expenses paid to property managers are tax deductable. The tax advantages of rental properties are tremendous and covering the management fees is part of that.
4) There are many legal requirements that can cause losses to owners if they are not aware. Fair housing, security deposit management, Lease requirements, eviction requirements can cost you money if you are not aware. One more … in New Mexico, relatives and friends cannot legally manage your property for you in most cases, unless they are a licensed real estate agent. This means they cannot legally enforce the lease or make tenant pay rent and they can be fined for performing this service.
More reasons to come!
Real Property Management Rio Grande
www.rpmriogrande.com
505-292-4765