how to estimate expenses?

[Weam Banna]

How can I make an accurate estimate of expenses for a rental property? And thanks in advance

[Marc Ferguson]

Hi @Weam Banna,

I'm not sure how "accurate" your estimates could be--there's a lot of estimating in the beginning of a deal. Based on the rental calculator expenses are:

• - property taxes
• - insurance
• - repairs & maintenance
• - vacancy
• - capital expenditures
• - management fees
• - electricity
• - gas
• - water & sewer
• - hoa fees
• - garbage

A couple of those are easier to calculate. The rental income you collect you'll want to set 5% of that for repair & maintenance, 3% for vacancy, another 5% for capital expenditures, and 10% for management fees. Anyone of those numbers are adjustable, but it's a decent place to start.

Electricity, gas, water & sewer, and garbage are based on the city your property is located. So; you'll have to look at their websites. You should be able to determine if there are any HOA fees if it's in a community, Zillow, or maybe just ask someone in that neighborhood. Word-on-the-street is real estate investment is more social than running numbers. :)

Is there a specific expense that you are unsure of or was your question more general?