Expense as a percentage of income

There is a lot of discussion on this board about operating costs generally running %40-%50 of income. Now that everyone is heavily involved doing taxes it may be a good time to post the results for 2007.

Unfortunately, tax time will not help most landlords determine their operating expenses. Even people with many properties don’t understand this issue and don’t keep accurate records of their expenses. If you doubt that fact, all you need to do is read the posts on this forum. Even landlords with 20-30 rentals completely ignore many of the expenses, considering them “off budget” and paying them out of pocket.

Mike

The first two of my rental fleet came in at 27% and 31%. Both had some vacancy and turn-over, but fairly light in the repair expenses. Typically, I’m in the high 30’s, but it not hard to hit 50% if you have a bad year.

I did two more over lunch. Two four unit buildings that sit side by side. One came in a 28% and the other was 52%. The latter one had high expenses as I had to re-carpet 3 out of 4 units.