Landlording & Rental Properties

How to Accurately Estimate Expenses on a Rental Property in 3 Easy Steps

Expertise: Landlording & Rental Properties, Personal Development, Real Estate News & Commentary, Real Estate Investing Basics, Business Management, Flipping Houses, Mortgages & Creative Financing, Real Estate Deal Analysis & Advice, Real Estate Wholesaling, Personal Finance, Real Estate Marketing, AskBP
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Estimate Rental Property Expenses

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You give me $20,000 and I’ll give you… nothing. In fact, you’ll give me another $50-$200 per month until you go crazy or broke.

Sound like a good trade?


Then why are so many landlords making this trade with every investment property purchase?

Yes, I’m talking about negative cash flow. I’m talking about losing money on a rental property. It happens all the time, and it leads to financial ruin. I should know — 90% of the deals I have purchased have been from “failed landlords.” So why do so many landlords fail?

Simple. As I talked about in my recent article, “Why Are So Many Landlords Going Bankrupt?,” landlords simply don’t know how to do the math correctly. They buy properties based on emotion, gut, or bad math and then wonder why they keep losing money.

And where are they losing the most money?


The fact is: most landlords severely underestimate the costs it takes to own rental properties.

This post is designed to help you make smarter decisions by enabling you to accurately estimate expenses on your next investment property purchase. Let’s get started.

How to Accurately Estimate Expenses on a Rental Property

Sure, if you already own a property in the area, it’s simple to find out what costs are: just look at your other properties.

However, most of the time, you’ll have no idea because you don’t own a property in the area. Instead, here are a few simple tips for uncovering the future potential expense on your rental property:

  • Ask local property managers: Most property managers would gladly give you this kind of information, knowing that the more helpful they are, the greater chance you may use them as a management company someday. Simply call them up and say, “Hi, I’m looking to buy a rental property in the ____ area and am just beginning my research. Do you mind if I ask you a couple quick questions about expenses?”
  • Make some phone calls: Secondly, feel free to simply call the company who issues the expense and ask them! For example, not sure what water will cost on your next rental house? Call the company or government institution in charge of the water billing and ask them! Most of the time, they will give you an average on the property for the previous few months or at least give you a good ballpark.
  • Ask other investors: Finally, ask others who own rental properties in the area. You can find them through local real estate clubs, by looking up public records, by asking your real estate agent for referrals, or by simply connecting with them on BiggerPockets. If you are a BiggerPockets Pro member, you can use “” to find investors in any zip code in America. Simply reach out to them and ask for help!

Now that you know how to find out about the expenses, let’s talk about what expenses you need to account for.

Step One: Identify Fixed Expenses

The first thing we want to look at are the fixed expenses. Fixed expenses can be a little confusing because they are not always “fixed” per se, but they are regular in running your rental business in that they occur often and with repetition.

Related: Don’t Forget To Budget For These 3 Overlooked Expenses

Below is an example of the most common fixed expenses you are likely to experience with your rental property. Not every one will apply to your property, but this should give you a pretty good idea.

Water/Sewer: Oftentimes connected on one single bill, this is the charge you’ll pay each month for the use of city water and sewer. On homes, this is often paid by the tenant rather than the landlord, but this is not true in all cases, so be sure to check with the competition in your area and find out if you can get away with offsetting this charge to the tenant.

Property Taxes: As they say, the only things sure in life are death and taxes, so of course you’ll need to account for this expense. Property taxes are sometimes included with the mortgage (along with insurance), but not always, so be sure to check on your property. Taxes are typically in America paid in two halves, usually in the spring and again in the autumn. When estimating your property taxes, be sure to always look at next year’s property tax bill — not last year’s. Taxes almost always go up each year!

Electricity: Although usually paid by the tenant, many multifamily properties still pay the electricity for the property or part of the property (such as parking lot lights or storage areas).

Garbage: Garbage can also be paid by either the tenant or the landlord, depending on the arrangement.

Natural Gas/Wood/Other Heat: Another expense that is often paid by the tenant, but be sure to investigate.

Insurance: Insurance (along with property taxes) is often included with the mortgage payment, but if not, be sure to set aside money for insurance expenses each month. Insurance is typically paid in one lump sum once a year, but many insurance companies do allow monthly payments, oftentimes for an additional fee.

Homeowners Association Fees: If your rental property is located within a Homeowners Association (which is a collection of neighbors who are legally bound to uphold certain rules to live within the area), you will have to pay a “Homeowners Association Fee.” This is most common with condos or upscale neighborhoods.

Special Assessments: Many times, a homeowner’s association or local government municipality will enact special assessments that will cost you each month. There is no great way to predict future special assessments, but talk with the neighbors to see if there are any current assessments in the neighborhood.

Other: Besides those fixed expenses listed above, there may be other expenses that are unique to your area. Again, talk with local landlords, property managers, and others in your local real estate market to find out, and be sure to include those.

Property Management Fees: Property management is, of course, when you hire someone else to manage your property for you. However, it goes deeper than that. If you decide to manage yourself, understand that this is the “business” side of your investment and, as such, there will be costs associated with it (paper, gas, your time, etc.). I suggest including an expense for “Property Management” whether or not you plan to hire someone else — because it’s still an expense. Besides, someday you will be successful and have numerous properties… and will be unable to manage them all yourself. You might as well start budgeting for that day now! To determine how much to allocate for property management, simply call up your local management companies and find out what they cost.

Keep in mind: most management companies include both a monthly percentage AND a fixed-fee every time they rent out a unit. So a property manager who rents your property for 10% of the rent and has to fill your unit once every year will cost you more than 10% because of the extra fee. The most common fee I see is equal to 1/2 of the first month’s rent, though some management companies may charge more — up to a full month’s rent. To be safe, I typically add 1-2% to whatever the monthly rate is. In other words, if a manager charges 8% of the rent collected each month, I will budget 9-10% just to be safe.

Step Two: Identify Variable Expenses

I like to break down these expenses differently than those above because these are generally “percentage-based expenses” instead of single cost expenses, as above. In other words, these expenses are calculated by using a percentage of the rent that comes in.

Vacancy: Your property is not going to be occupied 100% of the time. Sorry. Rather than complain about it, budget for it! This is why the “vacancy” factor is so important to include in your calculations. Generally, the vacancy rate is given as a percentage based on the income that comes in. Therefore, a property that is empty 1 month every year would be 1/12 = 8.3%.

Vacancy rates differ dramatically between various markets and property types, so be sure to do some research from local landlords on what you can expect. In my area, I typically plan on about a 5% vacancy rate.

Repairs: Repairs are another tricky expense to nail down because you never really know. Some months you could spend $100 on repairs, and other months you could spend $500 or $0. However, over time, on stable properties, maintenance expenses do tend to level out on an annual basis. However, when estimating expenses for a rental property, I like to average these out on a per-month basis. For example, I might spend $500 this month, $100 next, nothing for the following 10 months (which is fairly typical). This means I spent $600 for the entire year. Divide that by 12, and you get $50 per month. If the property brings in $1,000 per month, that would be a 5% repair budget (because $50/$1,000 = 5%).

CapEx: Perhaps the item that is most often ignored when doing expense calculations, the CapEx (short for Capital Expenditures, or “Capital Improvements” in IRS language) are the big-ticket expenses that occur only occasionally. These are not “repairs,” but actual improvements to the property that add significant value. This includes putting on a new roof, redoing the driveway, updating the electrical or plumbing, and more. Obviously, the amount of CapEx you will or will not have to do will greatly depend on the age and condition of the property. For example, a property just build this year will probably require far fewer major improvements than a property built in the 1920’s.

So how much should you estimate for CapEx?

While there is no rock-solid number, I tend to estimate between 5-7% of the gross rent. In other words, if I were looking at a six-unit property that rented for a total of $2400 per month, I would set aside between $120 and $168 per month for CapEx. This works out to between $240 and $336 per unit per year.

Related: 4 Steps to Reduce Your Rental Property Expenses by $100 per Month

Other: Once again, in your area, there may be other miscellaneous monthly charges that are not monthly or annual. Be sure to ask local real estate investors what you might expect in this area.

Step Three: Put It All Together

Finally, it’s time to put all your numbers together and see what you get. At this point, it’s as easy as adding, subtracting, and a little multiplication.

To make things easier, I want to offer a very helpful tool:

The BiggerPockets Rental Property Calculator. 

This tool allows you to fully estimate your expected return on investment, cash flow, and more from your next property. Simply walk through the simple guided steps, and you’ll discover your total expenses in no time. The BiggerPockets Rental Property Calculator is designed to make the analysis process much easier — and give you a professional document to showcase your property to lenders, partners, and more. Check it out today at

If you are doing these calculations on your own, simply add up the numbers and discover how much your property will likely cost you each month. Remember, these numbers are averages, over time, but should give a fairly close guess at what the future will hold for your property.

Another Option to Analyze Rental Properties: The 50% Rule

Okay, great — now you know how to spend 20 minutes figuring out the expenses on a rental property.

But what if you just want to have a rough estimate? After all, if you are screening through dozens of properties everyday, you can’t spend all this time analyzing every single one.

Enter: the 50% Rule.

The 50% rule is a very simple rule-of-thumb calculation that allows you to quickly estimate the expenses, and therefore cash flow, of a rental property.

Very simply: the 50% rule says that half of what you make in income will leave in expenses, NOT counting the mortgage payment.

Here’s a quick video I made a while back explaining more:

So, a property that rents for $1,000 per month will likely have $500 per month in non-mortgage expenses. If the mortgage was $400 per month, you could potentially assume $100 per month in cash flow.

Now, how accurate is the 50% rule?

Well, it depends. It is JUST a rule of thumb, which means you should never make a decision based on it. Sometimes you’ll find expenses in the 40% range. Sometimes in the 60% range. It really depends on a lot of factors, which is why this is just a rule of thumb. However, I use it on a daily basis to quickly screen through properties so I can decide which ones I want to dive in deeper on.

Wrapping It Up

Look, I don’t want you to fail.

I want you to be so successful that you don’t know what to do with all your money (so you give it to some worthy charities and buy me some Starbucks!).

However, wealth creation through real estate starts with correct math. 

Understanding how to calculate expenses is vital in making sure your math truly adds up. Obviously, there is no perfect way to predict the future of your investment property, but taking a simple, mathematical approach to estimating expenses will help you hedge your bets in the best way possible.

If you have any questions or just want to say hello, I’d love if you would take 30 seconds and leave me a comment below! I’m happy to chat with you more about this!

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He began buying rental properties and flipping houses at age 21, discovering he didn’t need to work 40 years at a corporate job to have “the good life.” Today, with nearly 100 rental units and dozens of rehabs under his belt, he continues to invest in real estate while also showing others the power, and impact, of financial freedom. His writings have been featured on,,, Money Magazine, and numerous other publications across the web and in print media. He is the author of The Book on Investing in Real Estate with No (and Low) Money Down, The Book on Rental Property Investing, and co-author of The Book on Managing Rental Properties, which he wrote alongside his wife, Heather, and How to Invest in Real Estate, which he wrote alongside Joshua Dorkin. A life-long adventurer, Brandon (along with Heather and daughter Rosie) splits his time between his home in Washington State and various destinations around the globe.

    Jay C. from Seattle, Washington
    Replied almost 5 years ago
    Good post with good point. One point came to me in your post when you said you had purchased 90% of your deals from failed landlords. Many of my properties have the same story. I think you have a future story right there. Why is the best pool of good properties being provided by folks who like us gave it a go and failed ? Thats al I have. Great post and info.
    Brandon Turner Investor from Maui, HI
    Replied almost 5 years ago
    Thanks Jay! Yeah, it’s crazy about how many bad landlords there are. I’ll have to write more on that soon!
    Mike McKinzie
    Replied almost 5 years ago
    Just a small correction Brandon. You state, “Very simply: the 50% rule says that half of what you make in income will leave in expenses, NOT counting the mortgage payment.” The rule actually states, “50% of COLLECTIBLE MARKET RENT will be your expenses.” For instance, like you said, on $1,000 of rent, your expenses should be around $500. But if you have a one month vacancy and collect only $11,000 for the year, your expenses, INCLUDING the vacancy, should be around $6,000, NOT half of the collected $11,000. But a great BLOG for any investor, new or experienced. Reply Report comment
    Mike McKinzie
    Replied almost 5 years ago
    Just a small correction Brandon. You state, “Very simply: the 50% rule says that half of what you make in income will leave in expenses, NOT counting the mortgage payment.” The rule actually states, “50% of COLLECTIBLE MARKET RENT will be your expenses.” For instance, like you said, on $1,000 of rent, your expenses should be around $500. But if you have a one month vacancy and collect only $11,000 for the year, your expenses, INCLUDING the vacancy, should be around $6,000, NOT half of the collected $11,000. But a great BLOG for any investor, new or experienced.
    Brandon Turner Investor from Maui, HI
    Replied almost 5 years ago
    Ah Good point, Mike! A technicality, but true 😉 Thanks!
    Drew MacDermott Investor from Lebanon, NH
    Replied almost 5 years ago
    Fantastic article, Brandon! I’m sure there will be a few naysayers in that the 50% rule isn’t always accurate. And that is exactly the point, as you state. Different areas and markets see slightly different expenses and each investor needs to tweak their strategy accordingly. I am a civil engineer and subsequently an Excel nerd, so I have always gone beyond what is generally necessary when analyzing numbers. During my time in BP this past year, I have done quite a bit of research of what numbers and estimations I should be using when finding properties. You have summed a years worth of work for me right here!
    Brandon Turner Investor from Maui, HI
    Replied almost 5 years ago
    Hey Drew, thanks so much for the comment! Yeah, the 50% rule is what it is – a rule of thumb! I love it for quickly scanning through hundreds of properties to determine what is worth my time looking at! Thanks for the comment!
    Ben Leybovich Rental Property Investor from Lima/Chandler, Ohio/Arizona
    Replied almost 5 years ago
    And this is how people get into trouble 🙂 This is how you and I analyzed buildings. I’ve moved on, but apparently you still analyze this way…You missed some big items, my friend. What you have here is what we call Pro Forma analysis – looks good on paper but means nothing in reality. Where’s the Loss to Lease? Where’s the bad debt? Where are the concessions? Where are the free/discounted units to your management team? How about marketing costs, administrative costs, contract services, etc. These things I mentioned will easily eat-up 12%-15% of what you think that NOI will be 🙂 Now – there’s nothing magical about estimating any of these costs. If you look at 30,000 units and average the operating costs, you can gain a pretty clear perspective – a whole lot better than the 50% rule…lol All this stuff is good enough for a 4-plex around the corner, and only if you want to continue climbing on roofs fixing fascia cause you ain’t got the cash flow to pay someone to do it. If, as you say, you are ready to expand your intellectual worth and play the game with the big boys, talk to me first. As you know, I’ve been getting some pretty fantastic training from the best of the best 🙂 Good for SEO, bad for personal development…no?
    Brandon Turner Investor from Maui, HI
    Replied almost 5 years ago
    Oh Ben, ben, ben, ben. This is why you “teach” and I “do.” You’ve lost touch with the little guy and can’t think outside 200 unit buildings and jet planes, gold chains, tigers on a gold leash and other rich guy stuff! 😉 No one calculates “loss to lease” or “bad debt” when trying to find simple rental properties and you know it! Come back and join us, the little guy, Ben! And no one has a management team on site with small properties. No free rent, etc. Besides, if you notice, I did include 11% for Property Management which, even you would have to admit, is MORE than enough when dealing with large properties for property management. So yes, this is not the calculation one would do when buying a 200 unit building, but those folks would not be searching BiggerPockets for “How to Estimate Expenses” either! Rule #1 of teaching: know thy students! Now get back to work and go find some real estate for us to buy! 😉
    Ben Leybovich Rental Property Investor from Lima/Chandler, Ohio/Arizona
    Replied almost 5 years ago
    Hah – nice. According to you, I am no longer a little guy 🙂 That’s something, I suppose. I do remember you telling me that you were giving free rent to your one-time manager. Am I wrong…:)? Is what you are saying that I am at the wrong place trying to teach the mature, sophisticated, and intellectually honest approach to REI? nobody here wants to know this – is that what the underlying message is? As I learn and refine my perspective is not my desire to drag BP along appreciated by folks here? Do “little guys” not want to grow up? Like I said – good for SEO, bad on intellectual honesty…
    Gloria Dulan-Wilson from Philadelphia, Pennsylvania
    Replied almost 5 years ago
    Thanks for the comprehensive breakdown Brandon – I’m looking at a property that is going to be owner occupied by yours truly – so I’m not counting my unit for rent – but I was still trying to deal with the fact that there will be two rents instead of three, and how to make sure that it’s a positive, sound investment – not heading for disaster.
    Brandon Turner Investor from Maui, HI
    Replied almost 5 years ago
    Hey Gloria, best of luck! I did that “house hacking” thing with a duplex and it worked out great for me! Have fun and do lots of math!
    Steve Babiak Real Estate Investor from Audubon, Pennsylvania
    Replied almost 5 years ago
    You missed rental license and inspection fees …
    Steve Babiak Real Estate Investor from Audubon, Pennsylvania
    Replied almost 5 years ago
    And then there are Professional Fees, such as lawyers and accountants …
    Brandon Turner Investor from Maui, HI
    Replied almost 5 years ago
    Aha good points! Thanks Steve!
    Replied almost 5 years ago
    great post loved it would like to lean more
    lissa hall
    Replied almost 5 years ago
    Yeah, Nice article Brandon. Fixed cost also become variable in long period of times. Thanks for it.
    Michael Maness Real Estate Investor from Fort Worth, Texas
    Replied almost 5 years ago
    Brandon, this was a great read. I am just getting started and this is going to help a lot.
    Brandon Turner Investor from Maui, HI
    Replied almost 5 years ago
    I hope so, Michael! Thanks 🙂
    Zulf H. Investor from Chicago, Illinois
    Replied almost 5 years ago
    Great article Brandon. I have created my own excel spreadsheet with all the expenses for my properties, but I will try the BP rental calculator. I have realized that most of my expenses have come from maintainance related cost. Also, you mentioned that the typical charge for using an agent to rent out an apartment is 1/2 month. I have been paying one month rent to the broker who helps me buy these properties. Since my investments are out of town , I ahve to rely on her. Should I be shopping around to get a lower fees for renting these properties as I have 10. (It adds up) Thanks for the tips. Z
    Brandon Turner Investor from Maui, HI
    Replied almost 5 years ago
    Hey Zulf, thanks for reading and commenting! We also spend a LOT on maintenance – it makes me wish some of my properties were a bit newer! And yeah, it’s worth shopping around, but honestly, most PMs are going to be whatever the other one’s are, so most likely your area is just a bit more expensive than mine!
    Michael Ridley
    Replied almost 5 years ago
    Hey Brandon, I read a lot of your post and I love the information you provide. I am looking to have my first deal under my belt first of the year. Now that you have shown me how to calculate expenses, what books are out there that you like that can help me crunch the numbers on other expenses related to rental property of multifamily units if there are any? Also, what other calculators does Biggerpockets offer?
    Nathan Shepard Automotive Technician from Kansas City, Missouri
    Replied over 2 years ago
    Hello Michael, I myself am staring up and pretty eager to grab my first property. I see its been a few years since this post. Just wanted to check in and see if you’ve gotten started yet? Would love to hear some stories about how you’ve progressed. Best Regards, Nathan
    Don Clark Real Estate Investor from St. Louis, Missouri
    Replied almost 5 years ago
    Brandon, thanks for the break down. It comes at the perfect time for me, as I am about to start building my portfolio of rental properies after 3 months of learning and planning. I am hoping to buy 2 per month. I have learned so much through this site. But, I guess I need to learn about “loss to lease”, that’s a new one for me. You and Ben’s friendly banter is great.
    Russell Tidaback
    Replied almost 5 years ago
    Great Article…this is what I love about BP!
    Russell Tidaback
    Replied almost 5 years ago
    Great Article…this is what I love about BP!
    Christopher Shaw from Glenside, Pennsylvania
    Replied almost 5 years ago
    Thanks for shedding some light on the 50% rule.
    Eric D. Investor from Eagan, Minnesota
    Replied almost 5 years ago
    I get people sending me properties that they are going to buy and asking for my opinion. Many are negative cash flows, especially when you consider management fees. “I am going to manage it myself, so there is no fee”. That’s what I need to find. Someone to manage a property for me, for free. It would free up a lot of my time.
    Shaun Reilly Landlord and Rehabber from Newton, Massachusetts
    Replied almost 5 years ago
    “Natural Gas/Wood/Other Heat: Another expense that is often paid by the tenant, but be sure to investigate.” Wood? Tell us about THAT place! 🙂
    Javier Marchena from Winter Springs, Florida
    Replied almost 5 years ago
    Thank you for this article!!!
    Dan Cotter Developer from Atlanta, GA
    Replied over 4 years ago
    Good article, B.
    Chi Cheung Investor from Brooklyn, New York
    Replied over 4 years ago
    Thanks for the detailed writeup Brandon! On one of the web casts, you mentioned that you were able to save on property insurance because you have multiple properties. What’s the name of this type of insurance policy? Also, people that willing to accept negative cashflow (assuming 25% down) is due to expectation of appreciation. It is risky, but has worked wonders in places like New York City, at least for the last 2 decades.
    Shadrach Castillo Real Estate Investor from Chicago, Illinois
    Replied over 4 years ago
    I plan on buying a three unit property. Should I treat it as a two unit when applying the 50% rule if I plan on living in one of the units?
    Deanna Opgenort Rental Property Investor from San Diego, CA
    Replied over 3 years ago
    old post, but no, you don’t ignore the value of the rental you will be occupying, nor do you ignore it’s maintenance. Divide expenses by 3, pretend you are renting the unit you are occupying. BTW, remember you don’t get to take tax depreciation on that 3rd unit.
    Juan Carlos Quiroz Zolezzi Lender from Upland, California
    Replied about 4 years ago
    Brandon, good article, but… you forgot to talk about the most important line item of all, PROFIT…
    Replied over 3 years ago
    Just wanted to clarify…when we say kiss 50% of our rent goodbye to expenses, we are including taxes and property insurance into that 50%? I wanted to clarify, because a lot of times I think of my “mortgage payment” including my taxes and insurance (escrow payments). Thanks!
    Pamela Kinzey
    Replied over 3 years ago
    Good article. 50% sounds about right. Not sure if I saw landscaping in the list. I was covering lawn mowing for 2 of my duplexes. I got too old to haul lawn mowers around (61 yr. old widow), so paid friend. It was costing too much of my rent during the summer. One tenant thought it needed cut about twice a week , and there were kiddie pools, toys, grills, etc. in the way. I gave everyone a rent cut, and let them do their own like the other landlords in the neighborhood. Everyone seems happy -more likely to afford rent on time, and the lawn is to their liking. But, I notice now that they are content with mowing every week or two. I still keep up the shrubs and flowers. There are little regular expenses, and there are a few bigger less frequent expenditures to plan for. Large pine trees do not belong in a yard, IMO. I was paying big bucks for removal of about one big tree per year, as pine beetles hit one at a time. As soon as i could afford it, I got a good price on group removal of the remaining 40. The under story hardwoods have really taken off now, and I rest easier when windstorms hit. After getting stumps ground, I had room to supply a gravel parking area for each tenant. (Although,they still park in the yard right next to the door, when they think I’m not watching.) Future expenses I’m readying for include re-roofing, painting, septic tank pumping. Little things like checking roofs for patching needs, gutter cleaning, carpenter bee damage are easy to forget. HVAC maintenance is a regular expense in the south, which can be major. Remember that everything you do for your own house has to be done for your rental. Even brick ranch homes require a fair amount of ext. painting with a ladder.
    Tomer Soran from Austin, TX
    Replied over 3 years ago
    Thanks for the article and all the content. Loved the No/Low money down book. I did a lot of education a couple months ago and after a little break I’m ready to make a move. Currently looking for my first investment in the New York Metro Area and its great to get a good refresher on terms and property analysis.
    Melody Bynum from Brooklyn, NY
    Replied over 3 years ago
    Brandon Turner what can I say? You are such a GOD send!!! This article is so well & meticulously written and basically covers every question I had on how to figure out the numbers to input into the BP rental analysis calculator. I can’t say how truly great fun & blessed I am to have a platform as such to assist in this very important wealth generating vehicle. Words couldn’t thank you enough
    Jesse Lane from Jacksonville, Florida
    Replied almost 3 years ago
    How do you go about calculating the amount that you could get for rent on a potential deal?? Thank you anybody for your reply!!
    Jasmine Patel from San Francisco, California
    Replied almost 3 years ago
    Very helpful article, thank you!
    Nathan Shepard Automotive Technician from Kansas City, Missouri
    Replied over 2 years ago
    Great post, Followed this link from the expenses tab on the path to purchase guide. This site has an amazing collection of knowledge, I’m very excited to see what else I find through the forums.
    Sulaiman Shah Real Estate Investor from Staten Island, New York
    Replied almost 2 years ago
    I have a question regarding the 50% rule. In my area for every rental property I have calculated the expenses are in the higher end ranging in 70-80%. I know this mostly because of taxes being so high but do you think it is a bad location for rental properties?
    Tim Baker
    Replied over 1 year ago
    Hey Brandon, fantastic article. Just one point I’d like some clarification on. When speaking of the 50% rule that does NOT include the mortgage payment – is property tax and insurance included in the 50%? Thank you.
    Johari Hughes Real Estate Investor from Austin, TX
    Replied over 1 year ago
    Thank you Branden great help and thank you for detailing out some of the specific bills and factors to consider for each!
    Danny Amorando from New Fairfield, CT
    Replied over 1 year ago
    So when you analyze a deal do you start with the 50% rule to see if its worth it or is there some other step you do before the 50% rule.
    James N Brannon Jr
    Replied 9 months ago
    Thanks for this article. I will begin practicing analyzing deals.
    Kate Johnson
    Replied 4 months ago
    If I had access to a mind-blown emoji I would post it. I’m a so green right now: I read RD/PD about 3 weeks ago and I was hooked. Now I’m listening to your Rental Property Investing book on audible on my commute and the BP podcast at work. I knew the process, especially getting started, would be challenging, but I thought that if I’m taking prudent risk it should all work out just fine! This article solidified to me why the purchase price vs the value of the home is vitally important. If I’m truly budgeting for all the expenses as you outlined for a home I was looking at, and I paid the approximate asking price (which appears to be about the actual value of the home), I’d have a -$220 cash flow each month. I definitely don’t want that! Thank you so much for opening my eyes. The deal has to be the right deal and the numbers have to make sense. I’m starting to get it. Thanks!