Property Management Cost Analysis

Rent & Time To Rent

Rent increase in year 2

Rent increase in year 3

Mortgage & Fixed Costs

What the owner pays each month no matter who manages the property.

Monthly mortgage payment Principal and interest, plus taxes and insurance if they're included

Other fixed monthly costs Anything else the owner pays every month, rented or not

What Counts As Other Fixed Costs?

Bills the owner pays whether or not the home is rented, that aren't already in the mortgage payment above. For example:

HOA or condo dues
Property taxes, if paid separately from the mortgage
Landlord insurance, if paid separately from the mortgage
Utilities the owner covers, like water, sewer, trash or lawn care
A home warranty plan

For a yearly bill, divide it by 12. A $2,400 yearly tax bill is $200 a month.

Maintenance & Cash On Hand

Industry-Average Recommendations: set aside 10% to 15% of gross rental income (or about 1% of the property's market value) each year for maintenance and repairs, and keep a cash reserve of 3 to 6 months of fixed operating expenses.

Maintenance and repairs budget

Year-End Totals

Difference is the second plan minus the first.

Owner's Cash Flow, Each Year

Monthly Costs