Calculating Monthly Expenses?

[Simon Cox]

Hey BP friends,

I'm putting together an excel sheet to calculate potential rental property deals and wanted to ask for some insight/criticism/refining regarding my monthly expenses.

So far I have the following:

Mortgage: $350*

Vacancy: 5%

Maintenance: 10%

Management: 10%

Property Tax: $210*

Insurance: $100*

CapEx: 10%

*based on my price range in Arlington, TX.

I have to say they have added up much quicker than I expected (which I was told would happen). Please feel free to suggest any changes you see fit. I'm new at this and need all the help I can get!

Thanks!

[Harriet Baldwin]

Depending on area and specific property, you may also have some utility costs and/or landscaping.

Trash service - some areas included in taxes, others usually tenant pays, but if landlord typically pays, add that in.

Maintenance and cap ex, when you have a specific property you can fine-tune those numbers.  Just like humans, some properties are a lot more low-maintenance than others.

Your entire mortgage payment does hit cash flow, but technically the principal repayment portion is not an expense (it is repayment of debt).  Cap ex ask your accountant, in many cases you may have a choice whether to capitalize or expense a given item.  Also for tax accounting, don't forget that depreciation is a non-cash expense...