How much does it cost to maintain a property?

How much does it cost to maintain a property?

Are you considering buying a property for investment? Do you want to rent your house to have an extra income at the end of the month? For you to understand if this is the best option for you, we clarify who is responsible for certain expenses.

Maintenance and repair works

Unless contractualized differently or resulting from the negligence of the tenant, maintenance works are the responsibility of the owner / landlord. If you are going to buy a property for rent, you should pay attention to what may eventually give you short-term problems, such as a damaged washing machine or a water leak in the ceiling. Inspection visits to a property, with a real estate agent, are essential to ensure that all details are clarified.

Because Casas do Barlavento also deal with property management, here is a tip to bear in mind when dealing with maintenance and conservation works! Casas do Barlavento advises that when you require some intervention on the property, you choose a local company of experts, as this will reduce your budget by saving on travel costs.

Condominium expenses

Another expense that falls under the property owner’s responsibility is payment of the condominium and costs associated with the administration and maintenance of the common areas of the building (if it is an apartment). It is up to the landlord to be present at the condominium meetings and access the renovations and expenses that are associated with the building during the year. Normally the monthly value of the condominium is calculated according to the estimated costs of maintenance and cleaning of common areas, elevators and security (if applicable) along with consumption expenses of electricity and water, based on previous consumption history. In addition to these costs, condominiums usually add a value to the reserve fund, to cover unplanned expenses and painting of the building.

IMI

The Municipal Property Tax (IMI) is an annual mandatory payment when acquiring a property, which is paid to the State by the owner and never by the tenant.

Insurance

If the purchase of housing was made through a bank loan, multi-risk insurance is mandatory.

Government lease taxes

It is mandatory to sign a leasing contract and there is a 28% tax levied on the rental income received from the tenant – rental income tax.

Utility expenses

Depending on the conditions defined in the contract, it is possible to determine whether utility expenses such as water, electricity, gas, etc. are included in the monthly rent or if it is a separate expense paid by the tenant.

Do not be alarmed, many of these expenses can be deducted on IRS partially or totally, such as: the painting of the property; expenses such as cleaners and gatekeepers; electrical system or plumbing repairs; electricity, lighting, heating and maintenance of elevators; security of housing; Property tax; Insurance premiums on buildings and municipal taxes (sanitation, sewage). Visit Casas do Barlavento, who can help you calculate a property's estimated expenses and lease estimates so that you can consciously and safely invest with the least possible risk.