So an overwhelming majority of costs associated with a rental are mortgages which luckily do not move with inflation (granted you have a fixed program).

On the sample report, I didn't see eviction expenses, court costs, entity maintenance, excessive damage done by tenants (above and beyond the security deposit), etc.

You said that he was in a more precarious financial situation than I am right now.Do you happen to know how he was able to secure 20 plots of land and have enough capital to build on these plots?

We can also help you secure creative financing.

I take checks for security deposit.

i don't know, if i have to worry about less than $20 per month, when i get an extra $4,000 to $5,000 in my pocket, than i am in the wrong business. plus, i plan on selling using a wrap to create cash flow. grant it, i'm talking about homes in the $80,000 price range.it would definitely make a difference on higher amounts.jim

Can I deduct these things from the security deposit and if so what are some other things you can deduct?

The REIT usually is or will go public, so you have more liquidity, can choose when to sell and recognize your taxes, if ever, remain diversified in real estate without any management headaches because now you own a security that invests in many commercial properties.

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Operating expenses also include management (whether you do it or not), maintenance, advertising, vacancy allowance, office supplies, legal fees, evictions, court costs, utilities paid by the owner, lawsuits, fuel for your vehicle (going to and from you rental), damage caused by tenants in excess of the security deposit, etc, etc, etc.