OWNING A USA INVESTMENT PROPERTY
LEASING – TERMS & COSTS
The content on this page is reproduced from www.US-Property-Investment.com with kind permission from Richard Lillycrop.Generally leases run for a 12-month period. After the 12 months, the lease will either be renewed for another 12 months, or revert to a month-to-month basis. All property managers have varied policies. For example in addition to finding tenants, they will take about a month's rent initially and the equivalent of one month's rent as a security deposit. Then each month's management fee will be around 10%. In some areas the management fee can be higher but the point to remember is the difference between a great manager and a poor one is worth more than a couple of percent a month. After the 12-month period, if your tenant renews their lease, your property manager will charge you a releasing fee and this will be a nominal amount as the tenant is already in place.
INBIB ensures that the property manager will hold the tenants security deposit, generally one month's rent.
Section 8 tenants have an ongoing lease, however the property must have a yearly inspection to continue receiving the next years' rents.
For utilities the tenant will generally pay for the electricity and gas/oil heating. Then depending on the lease agreement, the landlord may have to pay the water/sewer bills. The landlord is also responsible for paying the taxes on the property and the buildings insurance. Minor replacements/repairs are generally the responsibility of the tenant.
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Please Note - The information contained above should not be regarded as legal or tax advice and is our opinion only.