Charting and Trending Expenses.

General Landlording & Rental Properties
4yFollow

Charting and Trending Expenses.

Justin R.Pro Member
Rental Property Investor · San Anselmo · Member since 2015 · 659 posts · 600 votes

I wanted to share something I created, and would also like to get feedback. Like many people do, I invest in several geographical markets, but wanted a way to visualize the expense breakdown of exactly where my money goes. I wanted to then take this visual product and compare/contrast all of my real estate markets. The main 2 things I wanted categorized were......

Pie Chart 1. A breakdown of where all my money is going, including my cut (before debt service.) This is important for me to see how much money is going to me, based upon a percentage, from each region. I don't include Capex because that is something that technically increases value of the property and typically done with my approval. I don't include interest/debt payments because I want an even playing field within all regions to compare, similar to why we don't use debt service for a cap rate.

- I  can also compare and contrast each region by expense category. Great to see what the property management cost ACTUALLY is after all fees. 

- Great for trending and keeping an eye on uncontrolled levels of repair/maintenance

- Future analyses

- Prioritize where to start cutting expenses or negotiating

Pie Chart 2. All expenses represented as a percentage. Neat to see them broken down, but offers less relativity because if all expenses are high in that region, it really mutes visual concept.

Im not super keen on the tables with the black labeled Revenue and NOI on the left, but I needed to add this both for my own reference and as a place to insert figures from my P and L.

The Revenue/Expense ratio is also neat to look at, and makes you second guess the 50 percent rule of thumb. This location happens to be in the midwest, with 100 year old homes so it was expected to be higher than my areas of higher rents, and newer homes.

Please use or modify this template as you see fit. If you can offer any suggestions on how I can make mine better, or word a category correctly, please do. Mine is far from perfect and I am not an accounting, or tech person by any means. If anyone would like me to add this to the template section of BP let me know and Ill gladly do so.

0Reply
30 views

5 Replies

Jump to latestLatest
  • Jon KellyPro Member
    Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
    4y

    @Justin R. this is awesome, well done! 

    I think this is such an important stage to get to as an owner/investor. You allow yourself the ability to see the big picture and make decisions accordingly. This will help you make decisions on your existing properties (e.g. where to trim expenses or raise rents to offset expenses), but it will also help in using better assumptions when you analyze deals.

    It's so hard to think about these things when you're just starting out because you're doing everything and get caught up with all of the small things. I have 23 properties, 57 units and 13 storage units and I'm just at the point of trying to think about the bigger picture. Thanks for the inspiration! 

    Other suggestions: 

    - Do you have any "corporate overhead" (e.g. taxes, lawyer fees, phone, marketing, etc.) that you can allocate to each property? 

    - I know you don't want to include Capex in the pie chart, but can you include the number somewhere? I think it would be good to at least see your Capex spend.

    - Can you break out "maintenance/repair" to small categories? Maybe not on these summary charts, but somewhere where you see all maintenance/repairs if would be good to categorize to help you make decisions. For example, if 50% of your maintenance/repairs is turnover costs then maybe you should change your strategy to keep tenants in place longer. Or, if electrical is 25% of your budget then maybe find a better electrician or have an electrician go through all of your new purchases to fix/update electric on day 1. 

    0Reply
  • Justin R.Pro Member
    OP
    Rental Property Investor · San Anselmo · Member since 2015 · 659 posts · 600 votes
    4y
    Quote from @Jon Kelly:

    @Justin R. this is awesome, well done! 

    I think this is such an important stage to get to as an owner/investor. You allow yourself the ability to see the big picture and make decisions accordingly. This will help you make decisions on your existing properties (e.g. where to trim expenses or raise rents to offset expenses), but it will also help in using better assumptions when you analyze deals.

    It's so hard to think about these things when you're just starting out because you're doing everything and get caught up with all of the small things. I have 23 properties, 57 units and 13 storage units and I'm just at the point of trying to think about the bigger picture. Thanks for the inspiration! 

    Other suggestions: 

    - Do you have any "corporate overhead" (e.g. taxes, lawyer fees, phone, marketing, etc.) that you can allocate to each property? 

    - I know you don't want to include Capex in the pie chart, but can you include the number somewhere? I think it would be good to at least see your Capex spend.

    - Can you break out "maintenance/repair" to small categories? Maybe not on these summary charts, but somewhere where you see all maintenance/repairs if would be good to categorize to help you make decisions. For example, if 50% of your maintenance/repairs is turnover costs then maybe you should change your strategy to keep tenants in place longer. Or, if electrical is 25% of your budget then maybe find a better electrician or have an electrician go through all of your new purchases to fix/update electric on day 1. 


     Great points and thanks for the feedback!

    I created this as a broad high level visual of fixed and variable expenses so I wasn't going to break out categories. Now that you mention it, perhaps I will add another Pie chart with that detailed breakdown.

    I of course track my Capex on my P/L, but perhaps I will add another pie, or add that to one of the existing two. Or are you just thinking a simple table to express the Capex?

    Most of my corporate overhead is categorized into my "general" fund and not tracked within a property itself, so I left that off the pie chart. There is a bit of marketing and corporate costs (series LLC), which are small and reflected in the "Misc" category.

    Thanks for the input!

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    4y

    Great work!

    [email protected]248-209-6824
    Logical Property Management4.9462 Reviews
    WebsiteView Page
    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y

    @Justin R. I'm not a big numbers guy, but I do like it when someone else does the work!

    If you want, you can upload this to the FilePlace for others to find/use. Go to the bottom of any page, click "FilePlace" on the left side menu.

    Well done!

    The DIY Landlord Book4.7243 Reviews
    WebsiteView Page
    0Reply
  • Justin R.Pro Member
    OP
    Rental Property Investor · San Anselmo · Member since 2015 · 659 posts · 600 votes
    4y
    Quote from @Nathan Gesner:

    @Justin R. I'm not a big numbers guy, but I do like it when someone else does the work!

    If you want, you can upload this to the FilePlace for others to find/use. Go to the bottom of any page, click "FilePlace" on the left side menu.

    Well done!

    Thanks! Just uploaded. I have a Mac and uploaded in numbers format. I tried to export as Excel but it definitely got jumbled up. 
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free