costs to allow on rental

[duck]

I'm trying to work out how much I need to allow for costs on each rental.
I.E. insurances, specialist landlord insurance that will cover loss of rents, rates, maintenance, empty rental (how long to allow per year), anything else?

[Orkibi]

Hi duck.


in regard to vacancy's it depend where in the country are you?
allow min 2 weeks but if you want to be conservative go for 3. (this is for properties in main city's)

in regard to how much to allow for insurance it is depend on the property.
a 3bdr could have a premium of 500pa and a block of 6 flats could be $3000pa.

repair + maintenance also depend on the property, newish property could be $2000 and an old weather Bord could be 4k+.

everything adds up

[duck]

The property would be in Christchurch. I'm wanting to buy in a decent area. Perm materials dwelling. As low maintenance as I can find.

Thanks.

[BusyLizzy]

Property management fees (if you plan to use on) - around 8% normally.

Also - you will need to budget for routine maintenance each year (plumbing, electrical and other minor repairs). Then allow a separate 'improvements' budget for the bigger expensive items that will pop up every 2-3 years (eg repainting, new carpet, etc). You will be surprised how much more frequently you need to do this for rentals compared to your own property!

[Green Fish]

I would have a close read through the "specialist landlord insurance" policy. You should find that it is a pointless waste of money. (Nearly as bad as paying 8% to a property manager.)

[duck]

Property management fees (if you plan to use on) - around 8% normally.

I'm not planning on using a PM.

Also - you will need to budget for routine maintenance each year (plumbing, electrical and other minor repairs). Then allow a separate 'improvements' budget for the bigger expensive items that will pop up every 2-3 years (eg repainting, new carpet, etc). You will be surprised how much more frequently you need to do this for rentals compared to your own property!

How much to allow for routine maintenance and bigger stuff?

I would have a close read through the "specialist landlord insurance" policy. You should find that it is a pointless waste of money. (Nearly as bad as paying 8% to a property manager.)

Yeah, I've read a bit about LL insurance last night. I'll be giving it a miss. Just get rental insurance and save a certain amount for vacancy. Just wondering how much is needed.