It’s no secret that rental properties can be a great investment, but they can come with added risks and expenses. It is more and more common to hear that people are adding rental properties to their portfolios to generate extra income while also having another career. Other people may also choose to make this industry a full-time career. As with many big decisions in life, most people looking to break into the rental property industry will have to weigh the pros and cons. One of the biggest deciding factors for rental properties will be the anticipated expenses, especially in the beginning when you are looking to start getting reservations from your first guests. Some of these expenses can include maintenance costs, utilities, property management, and hospitality product upkeep.
Maintenance expenses can be wide-ranging from property to property, but a general rule of thumb is that maintenance costs will be around 10% to 15% of the overall rent prices property owners charge. Maintenance expenses can be described as any cost taken on by an individual or business that will keep their assets in good shape and working properly. Certain factors like the age of the property and underlying conditions can have a significant impact on the total maintenance costs for a property. Some common maintenance expenses include landscaping and tree care, pest treatment, replacing furniture and linens, heating ventilation, air conditioning repairs, and cleaning supplies. Other major maintenance expenses could be a new roof addition, complicated plumbing repairs, and new flooring.
Rental property owners should expect to pay for the following utilities.
- Air Conditioning
Property Management Expenses
It can be a lot of work to manage a rental property especially if you have another full-time job to go with it. Or you could be new to the industry and are looking for some outside help to get the business rolling. That’s why some owners decide to hire a property manager. They are typically responsible for managing the daily operations of the property which can include booking reservations, making sure payment is made, dealing with property repairs, property inventory, and customer service. If you do decide to hire a property manager, the cost could be around 10% of the monthly rent. However, it could save a lot of stress for the owner and give them time to focus on other issues.
Hospitality Product Upkeep Expenses
Hospitality products are another common expense. For those starting the property from the beginning, there will be an initial investment in items like furniture and home decor such as paintings and other items for display. Hospitality linens are an area that will need periodic replacement. Sheets and towels can easily get stained or ripped, so it is critical that your property keeps enough for backup in storage. InnStyle recommends having three of each type on hand. For example, there will be one sheet on the bed, one in the laundering process, and one in the closet. This should keep operations running smoothly for your housekeeping staff.
Amenities are another area that could take up significant amounts of this part of the budget. Your property will be cycling through many of the mini amenity bottles, and it will be someone’s responsibility to make sure inventory levels are properly stored so that there will be enough available for guests. One easy way to save money and time on amenities is to switch the property over to dispensing systems. They will help to lower operating costs since they won’t constantly need to be replaced and it reduces waste since the plastic bottles won’t need to get thrown out between each guest’s stay.
InnStyle is Here for Your Property
Owning rental properties is a desire that many people may be interested in pursuing whether it be out of passion, as an investment opportunity, or as a new learning experience. However, it is important to know all the benefits and potential challenges that can come with entering the rental property business. One area that everyone needs to be prepared for is the financial implications. Everyone has different budgets to work with, so that is why InnStyle aims to offer a wide range of linens and hospitality products that are suitable for all kinds of buyers. InnStyle prides itself on being a one-stop shop for all hospitality properties and wants to make the process of maintaining your property as smooth as possible. Please give them a call and speak with one of their account managers. They can be reached at 267-354-6020 or 800-877-4667. Their website is https://www.innstyle.com/.