Will_VIII posted... So what I'm finding is that a property manager/company gets 12% of the rent on average. Let's say the toilet breaks, do they fix it then bill me 100% of the cost?
It has been a few years since I was shopping around for management companies, but back then the higher end was 9% (probably dependent on area too though). You are on the hook for repair costs too, so like a typical maintenance thing for me is:
Tenant calls the management company saying the toilet is broken. Company goes out to assess the issue, they determine its say $300 to fix. If it was the tenant's fault, the tenant gets charged for the repair, if it is just wear and tear then the $300 is taken out of the monthly payment I would get from the management company.
If it is a big issue (anything over $200 in my case), the management company will get multiple bids from contractors and I have to approve of everything before any work is done and money is spent.
Maintenance issues aren't that bad typically, only a few random things a year.
Will_VIII posted... Quick math and it's probably not worth it.
Taking into account the rental estimate, 40% would go towards the mortgage, 12% to property management, and 24% towards taxes.
That doesn't leave much, especially if something needs repair and then I'm breaking even with the hassle.
If your mortgage is only 40% of what you think you can rent it for, then you should definitely rent it out, that is a fantastic ratio. My ratios are higher than that and I clear an annual profit pretty easy. Property taxes and insurance should all be wrapped up into your mortgage.
The 24% you are saying for taxes, I am assuming you mean income tax you file at the end of the year? Good news is you only pay that tax on your profits, you don't pay it on the amount of rent you collect. So for example you collect $1000 in a month in rent, $120 goes to management company, $300 goes to mortgage interest, $200 goes to generic repairs, $100 goes to Escrow (prop tax/insurance), $100 goes to HOA. You made $180 profit, so you are only taxed on that $180, so $43.