How Are Rental Property Expenses Calculated?

As a  real estate investor, you might be wondering: How are rental property expenses calculated?

Many people who have rental properties wonder how they are able to calculate their expenses for the year. This blog post will explain just that.

In a nutshell, the cost of a rental property is made up of two things:

1) The mortgage payment on the principle balance of the loan on the property.
2) The annual maintenance costs for that year.

The percentage will vary depending on your lender and area, but it’s usually somewhere around 1% to 2%. So if you bought a $100K house, your costs would come out to be about $187 per month in interest and expenses. Then there are taxes, which will also depend on what state you’re in. There are many online calculators that have this information put together for you to plug in values so that it won’t take a ton of time and energy for you to figure out.

For more information, check out our page on rental property expenses.