Biggest Expense in rentals?

[Nick Delfin]

Hi everyone! 

I am looking to purchase my first rental property.

What is the biggest on going expenses??

Single family home biggest expense?

Condo rental biggest expense besides HOA?

Thanks in advance! 

Nick

[Will Fraser]

One of my key findings in the first 40 units I've owned is that it totally depends on the bundle of lifecycles you purchase.  For example:  if you buy 20 new construction homes then vacancy will be your biggest cost.  If you buy 20 homes that are 30-70 years old and in a treed area then plumbing will likely be your biggest cash sinker.  If you live in an extreme climate then windows and HVAC could eat up your expense dollars at age.  It all depends on where you're buying these assets in their individual component lifecycles.  

Yet another praise must be given for the BRRRR strategy. If you can find a property that gives you the budget to DEEPLY renovate the house then refinance and have a bit of extra equity, you're setting yourself up to recreate the splendor of buying a new construction property, but often in more preferable locations.