After my last post, I sat down quickly and ran some numbers on how much I have saved on PM costs since I started landlording in July/2005. Using a baseline average of 80% of a month's rent to place a tenant and 10% of rent each month to manage, I came up with a total savings of $9,010. So in four years, I saved roughly $9,000 in PM costs alone.
Again, this is a very rough estimate as I didn't take into consideration things like opportunity costs (e.g., my time and money spent on marketing). However, I didn't add other things like overhead and other PM fees, either. For example, when the tenant called me last year about a problem with the water heater. I went over and the problem was fixed in less than 30 mins with no out-of-pocket expenses (excluding the gas to drive over). Had I been using a PM company, they would have sent a plumber out (at after hours, no less), and not only charged me with the repair, but also their added fee(s). Likewise in trying to get the two bad tenants I had out. It may have come down to actually doing an eviction with a PM company, and who knows how much that would have cost me.
So, all-in-all I've saved about $200/month these last 4 years doing PM myself. Can anyone say additional cash flow?
2 comments:
Give someone an inch they try to take a mile! never fails. hope you received it today!!
We received it yesterday (June 2nd), but it wasn't postmarked May 31st (when the tenant said they sent it). I'm still contemplating whether to ding them for a one day late charge.
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