Deal analysis for rental property: Q on annual expense in the terminal years

[Nav Singh]

Hello members,

I'm analyzing a rental property I'm planning to buy. I'm using the rental property calculator on BP. The annual income increases (as expected) from about $14K in Year 1 to about $25K in Year 30 based on the 2% annual increase I assumed. But the annual expenses first go up, and then between Year 20 and 30 they come down. Why is that? And because of that, the Cash on Cash ROI looks fantastic in terminal years.

Is it because I'm paying off the loan principal in the last 10 years? I can't figure out the reason.

Nav.