You're $9.00 upside down each and every month outside of expenditures.

Ex. expenditures and mildly reduce your Mts. expenditures so you should still be in good shape. 

Of course, I also account for capital expenditures, future vacancies, future property management, etc, but so far, it’s working out pretty well!     

While you may never fully break the bad habits, you can at least rest assured that you're providing a safe place for your elderly tenant and (hopefully) minimizing the waste of your time and expenditures. 

They allow you to build up a capital expenditure fund to pay large items such as a roof, furnace, sewer line, etc.

The key is to make sure you have enough monthly cash flow to cover future monthly expenses (you must take into account vacancies, and make ready after a tenant moves out, and capital expenditures such as roof and AC).    

@John T, Lots of good answers here, but in a nutshell, I'd- Screen your tenants as if your financial life depends on it - because it does- Have six months reserve for PITI - Not just for Freddy and Fanny, but for your peace of mind, vacancies, cap expenditures- Use your notices; If rent is due on first, enforce it second business day it is considered late, period.- Exercise your right as a landlord to advertise availability of unit the day you receive notice from tenant.

Since the property is being readied for rental use, Uncle Sam would expect that this be treated as a capital expenditure and included with land improvements.

Not to mention that major cap-ex expenditures may be acceptable at different points in your life. 

The company I work for manages approx. 100 units in the LA area and the average expenses for our stabilized properties run around 40% of rental income, less vacancy expense (this does not include principal & interest, and I used three years of data to average out the expenses, so I would figure a bit higher to include all possible capital expenditure items.)