What are ALL of your expenses per month on multifamily properties
What are ALL of your expenses on multifamily properties? There are many common ones such as mortgage, utilities, cap ex, vacancy, landscaping, and more, but I was wondering if anyone had dealt with even more specific and small expenses than that. Please let me know!
@Aaryan Patel if you DM me your email address, I'll send you a few P&L statements that you can look at.
I live in Sacramento but own a duplex in San Diego County. My expenses include trash, vacancy, landscaping, mortgage, and local taxes of San Diego County. Not sure if there is another tax like this for Sacramento. I was just billed something for $800 for last year so def talk to a tax professional in the area and see if that may apply as well.
If you're looking to buy, make sure you ask sellers which expenses are paid by landlord and which expenses are paid by tenants. They should list everything for you. Try and verify to ensure they're not leaving anything out or being dishonest.
I know a handful of people that bounce back and forth from SD to Sac. Do you know Zainah or Marissa by any chance? What made you decide to purchase in SD?
@Maxwell Ventura I don't know them but I purchased in San Diego because I was staitioned there for 5 years! I just moved back to Sacramento after I got out of the Navy :)
@Aaryan Patel, it depends on how broadly or narrowly you define certain categories.
Interest, real estate tax, insurance are fairly universal. Vacancy is not really an expense, it is a reserve or assumption in underwriting. Landscaping can be routine lawn care, snow removal, and can get into tree removal/trimming, new mulch, etc. Trash in my area for small multi's is part of tax bill from county/city, but if you have a larger property that can be a dumpster or private trash collection. Then you can also have valet trash, which is commonly reimbursed by tenants, but theoretically you could offer it free of charge to tenants.
Plumbers for leaky faucets and running toilets. Electricians for failing breakers. Turnover costs for carpet cleaning, paint touch-up, etc. Gutter cleaners a couple times per year. Garage door repairs, drywallers to fix drywall after failed flashing. Appliance repairs/replacements. Handyman for broken outlet covers at turnover.
Management fees, plus their mark ups for any services they contract out. Leasing commissions are common, if you don't self lease. Background check costs and marketing of vacancies. Accountant and lawyers. banking fees for wires/cashiers checks when buying. Potentially bank fees if you don't have a free account. Other banking fees, like if you use a "premium credit card" to handle business expenses, or credit card interest if you don't have cash on hand to pay for something and pay off the credit card in full. Bookkeeping software, any service/subscription fees, i.e. if cozy charges a fee to use their service.
Business filing fees, if you use an LLC. Financing fees for any new loans, etc.
