You own three rental properties in the Chicagoland area which you have purchased for $300,000. The properties are a big part of your investment plan and you take pride in maintaining them well and make sure you are careful who you rent to. You and your spouse both have busy lives so you work on the rental properties at night and on weekends. There have been times when the properties remained vacant longer than you would have liked because you didn’t have time to dedicate to marketing the property.
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Gross Potential Rent | $14,400 | $14,400 |
Vacancy | $4,800 | $1,662 |
Management Fee (8%) | $0 | $3,456 |
Maintenance Parts | $600 | $600 |
Maintenance Labor ($70 per hour) | $0 | $312 |
Maintenance Subcontractors | $900 | $900 |
Leasing Fees | $0 | $2,400 |
Renewal Fee (1/4 month rent of 25%) | $0 | $1,200 |
Net Operating Income | $36,000 or 12.3% IRR | $32,670 or 10.9% IRR |
Taxes (25%) | $9,225 | $8,167 |
Net Income | $27,675 | $24,503 |
34 Hours (Maintenance 6 hours, Leasing 16 hours, Accounting 12 hours)
4 Hours (Communication 2 hours, Reviewing reports 2 hours)
1.4% IRR & 30 hours of your time