All Chula Vista rental property owners are aware about the financial benefits of investing in this booming real estate market. For instance, Chula Vista is the second-largest city in San Diego County and is well-constructed for residents with diverse lifestyles. The neighborhood is well-established, with easy access to freeways such as SR 125 and Interstate 5, making traveling to any part of San Diego speedy and efficient.
A potential source of passive income and the subsequent financial security are some of the most sought-after advantages of investing in a Chula Vista rental property.
However, many investors are seldom aware of the hidden costs of owning a rental investment. There are certain less apparent costs associated with a Chula Vista rental house that every owner should be aware of. Having a knowledge of these expenses, especially before buying an asset, can help you make an informed decision with respect to your investment. These additional costs include:
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Taxes
As a home owner, you will be required to pay property taxes. These are often much higher than the taxes to be paid by the tenants living in the house. You won’t be considered for the homestead exemption, and the escalation in the tax might be unforeseen.
You can use an online rental property calculator to get an approximate idea of the current tax policies and subscribe to your local rental homeowners’ sites to get regular notifications about tax-related updates.
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Landlord’s Insurance
Landlord’s insurance covers the physical property related to the home you are renting out and is typically a huge amount to invest. The two main insurances that are usually bought are landlord insurance and homeowner insurance. The former generally costs 25% extra as compared to the homeowner insurance. It is important to consider the insurance for your rental unit in Chula Vista as it will help you decide the amount of rent and the deposit.
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Rental Property Maintenance Expenses
When you rent the house, you are still held responsible for the maintenance costs like fixing the heater, the sink, and the taps, among other repairs. More or less, 25% of your rental income would be used for addressing the maintenance issues.
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Property Management Fees
Hiring a property management team is highly recommended, as they can take care of inspection, repairs, lease creation, re-lease costs, pre-renting fees, legal expenses, and financial reporting, for your Chula Vista rental. However, property management fees can be a substantial monthly expense, cost you as much as 8 percent of the monthly rent.
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HOA Fees
If you buy a property in an HOA, you are required to pay the maintenance fees to the HOA for the development and maintenance of the communal parks, parking areas, streets, gyms, etc. The HOA management fees can be higher in Chula Vista, considering the high standard of properties and amenities provided in the city.
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Other Miscellaneous Costs
Other costs involved in owning a rental property in Chula Vista are the electricity bills, pest control, waste management, cleaning after the tenants vacate the house, gardening costs, major repairs, and replacements.
Being aware of these hidden costs can help investors prepare for future expenses and plan their finances accordingly.
First-time home buyers should consider consulting a trusted property management company in Chula Vista, like Encore Realty, that can help you understand all the advantages of owning a rental property and help you avoid the pitfalls. With more than 50 years of experience in rental management, our team of experts can help you make a smart decision when it comes to buying a home in Chula Vista. For more details, contact us at Encore Realty.
