If you’re thinking about investing in rental property, you’re probably doing your due diligence to make sure it’s the right move. Smart investors know it’s not just about the rent checks coming in, it’s about what’s left after the expenses go out.
Before you dive in, it’s important to understand the true costs that come with being a landlord. To help, here are four common (and sometimes overlooked) expenses you’ll face when buying a rental property in Wilmington.
1. Taxes and Fees
Property taxes are one of the most predictable expenses, but they can vary dramatically depending on the location and the property type. In Wilmington, this may include:
- Property taxes (based on assessed value)
- School taxes or municipal taxes
- Waste or recycling fees
- HOA or condo association fees
- State and federal income tax on rental income
Keep in mind that property taxes may rise over time, especially if home values in the area increase. Savvy landlords plan for annual increases so they’re never caught off guard.
2. Insurance
Insurance is another must-have cost. Rental property insurance—sometimes called landlord insurance—covers the building against fire, storm damage, and vandalism, while also protecting you from liability if a tenant or visitor is injured onsite.
Because natural disasters and extreme weather events have been increasing nationwide, insurance premiums in many markets are higher than they were just a few years ago. Shop around, and don’t forget to require tenants to carry renter’s insurance to protect their personal belongings.
3. Upkeep and Repairs
Even the best tenants can’t stop the normal wear and tear of a property. Repairs and ongoing upkeep add up quickly and may include:
- Appliance replacements
- Roof or siding repairs
- HVAC service and replacement (which can cost thousands)
- Plumbing and electrical fixes
- Landscaping and exterior maintenance
According to recent surveys, landlords should budget between 1% and 3% of the property’s value each year for maintenance. In Wilmington, labor and material costs have risen, meaning you may need to budget on the higher side, especially if your rental is an older home.
4. Time and Management Costs
Time is the one resource you can’t get back. Managing a rental involves:
- Advertising the property and showing it to tenants
- Running background and credit checks
- Collecting rent (and sometimes chasing late payments)
- Handling tenant calls about repairs or emergencies
- Periodically inspecting the property for upkeep
Many investors underestimate how much of a time sink this can be. That’s why more landlords in Wilmington now use professional property management companies, which typically charge around 8–12% of monthly rent. While it’s an added expense, it can save you time and reduce stress.
Should These Costs Stop You?
Not at all. Every investment has overhead. In real estate, the key is making sure the income outweighs the costs. Well-managed rental property can generate steady monthly income while also appreciating in value over time.
If you’re looking to sell your house fast in Wilmington, our team can assist with quick, hassle-free offers tailored to the local market. And if you want to explore rental property opportunities in Wilmington, we’d love to help.
Message us or call us directly at (910) 538-7737 and we’ll send you a list of available rental properties that fit your goals.
