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David Kosmecki

Maple Grove Rental Home Net Income Depends on Prudent Budgeting!

Friday, April 24, 2015 - Article by: David Kosmecki - American Pacific Mortgage - Message

Maple Grove rental property owes its popularity to the distinctive financial attributes it offers investors. Like a dividend-producing stock, it's a holding that stands to produce a regular income stream. It's also a real asset in the truest sense of the word--one with solid collateral value.

A) When it comes to quantifying a Maple Grove rental property's income-producing potential, after an investor has estimated the projected rental stream, there follows a less sunny exercise: expenses need to be taken into account. If a Maple Grove professional management service is going to be part of the equation, they will supply reliable budget parameters. If you will be managing the property yourself, doing a thorough job of nailing down this--the management budget--is as crucial to coming up an accurate bottom line as was projecting income.

B) Unless you are prepared to be at the beck and call of your renters 24/7, it's a good idea to budget funds for a skilled general maintenance person. If the Maple Grove rental property is an apartment building or set of condos, it's often a good idea for the maintenance professional to be kept on retainer. For single-property rentals, this handyman (or gal) can usually be hired on a job-by-job basis.

C) Every Maple Grove property differ, but it's generally considered prudent to reserve between 10%-15% of gross rental income for maintenance and repairs. This part of your budget includes remuneration for your maintenance person. Getting a rental home back to shape isn't always easy--especially because it's in both the landlord's and renters' interest to place a premium on speedy rehabilitation. That's not cheap!

D) There are also two words that belong in any rental property management budget: Property Insurance. The right formula may include a large deductible number (you've already budgeted an ample reserve for lesser emergencies), but it's also vital to take into account the possibility of any large and unexpected emergencies that you or your maintenance person can't handle alone. Tenants are encouraged to insure their own property, both inside and outside the rental property, but the landlord's policy should cover repairs to the entire structure, any small sheds on the property, landscaping damage, and the like.

If you are looking to the future--a future that includes owning a luxurious Maple Grove rental property--now is the time to start looking...and to give me a call! (763) 519-1100

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