Proforma: Buy-and-Hold Rental

[JoJo Tucker]

Hello Everyone,

I am creating a proforma for Houston, TX buy-and-hold properties. I wanted to ask the BP community how they account for fixed and variable costs.

Currently, my only variable expense is Property Management fees. I have property management fees at 18% of gross scheduled income (10% monthly fees plus 8% leasing fees). My fixed costs include any potential HOA fees, Repairs and Maintenance (1% of Purchase Price), Capital Expenditures ($2000/yr), Travel ($500/year), Vacancy at 8%, and a Fixed Rate mortgage.

My question is, what variable expenses do you account for? How? Do you keep vacancy at a fixed percent year-to-year? I assume a 1% Y.O.Y. gross schedule rent increase. 

Thank you!

JoJo