There are a number of expenses associated with rental property. The exact outlay will vary based on the type of property, condition, use of a management firm and more. Below are items we’ve come up with for your review. You will need to determine annual expenses to calculate NOI and CAP rates.
- Commissions Paid to Find Tenants
- Property Management Fees (if you use a outside management firm)
- Maintenance, Cleaning & Repair
- Insurance: Property, Home Warranty
- HOA fees
- Cleaning (between new & old tenants)
- Landscaping, Pool Service, Utilities
- Advertising Costs to Find Tenants
- Tenant Screening & Background Checks
- Legal & Accounting Fees
- Property Taxes
FYI:
- You’ll want to talk to your accounting pro to know what expenses can and can not be deducted.
- Some landlords like to use Home Warranties to help fix repair and maintenance costs.
- Purchasing a condo or townhouse may reduce some maintenance costs. HOA fees can offset the dollar savings though.
