Balance New Orleans Rental Income with Solid Budgeting

Owning a New Orleans 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. For clever New Orleans rental property investors, it’s also an asset that can build value over time.

For Sale in Uptown New Orleans

When it comes to quantifying a New Orleans 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 New Orleans 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.

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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. The ideal candidate can deal with a myriad of issues, from electricity outages to clogged garbage disposals. If the New Orleans rental property is an apartment building or set of condos, it’s often a good idea for the maintenance pro to be kept on retainer. For single-property rentals, this handyman (or gal) can usually be hired on a job-by-job basis.

Specifics for every New Orleans 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 status quo 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!

There are also two words that belong in any rental property management budget: property insurance. The right formula may include a sizeable 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. It may be common business wisdom, but over large parts of the country, this past harsh winter once again demonstrated the wisdom of the practice. 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.

Would you consider selling YOUR home? Name your price!

This is the traditional time of year when many of the most promising investment properties go on the market. If you are looking to the future—a future that includes owning a lucrative New Orleans rental property—now is the time to start looking…and to give me a call!

Terez B. Harris (504)975-1033 TerezHarris@kw.com

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504.297.2619

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Terez B. Harris
Terez Harris NOLA Realtor Group

(504)297-2619

www.TerezHarris.com
TerezHarris@kw.com

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Terez B. Harris   Terez Harris NOLA Realtor Group   504-297-2619   www.TerezHarris.com
Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100

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