After recent significant increases in property taxes, homeowners insurance, utility costs, supply costs, maintenance costs, and construction costs the margins are thinner to a significant degree.

This is In a state with no income tax, low maintenance homes, and a low federal tax bill due to depreciation. 

Property Management Software: If managing rental properties, use platforms like Buildium, AppFolio, or Yardi to automate rent collection, maintenance requests, and tenant communication.

The reality is, rising property taxes, maintenance costs, increase insurance premiums (I'm a broker so don't get me started here), an HOA assessment or annual increase, etc, etc, etc.

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.This example shows that while the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall annual loss.

Ensure that the projected rental income from the multifamily property comfortably covers these expenses, along with any potential vacancies or maintenance costs.Interest Rates and Terms HELOCs often have variable interest rates.

Taxes, utilities, maintenance, cleaning, marketing...Gross income doesn't mean squat to your wallet.

And over the years, pool maintenance, lawn maintenance and other such expenses, just kept going up.I got the rent numbers from looking at comps, and this assumes I have a tenant 100% of the year, which is probably way optimistic.Please let me know what you think.

Accounting for approximately $10,000 of repairs, maintenance, and capital expenses per month, this still leaves a passive stream of about 20,000 to split between two partners.

The new investment earns $24,000 a year, but the mortgage + the equity loan cost will be $22,332—and that’s before you account for taxes, insurance, maintenance, capital expenditures, vacancies, etc.