Assessing Rental Properties

[Jason Ehlert]

I am learning how to analyze deals currently and saving up for the down payment. When assessing a deal what are the expenses newbies need to know about that many forget?

[Gino Barbaro]

In apartments, expenses should run about 50-55% of income.  That is just a rule of thumb

Be sure to add a management fee to manage the property.  Operating expenses include utility, payroll, landscaping, pest control, taxes, insurance, repairs and maintenance to name a few

These are expenses, different from capital expenditures such as fridges hot water heaters and flooring.  They are treated differently in terms of net operating income but still affect your cash flow

Gino