Most owners don't know what their actual return is.
Most owners don't know what their actual return is. They know the rent amount. They know the mortgage. But they've never actually calculated what they're making after everything.
Here's what eats into your return that most people forget to count:
Vacancy. Even if your property is rented 11 months a year, that's 8.3% vacancy. On a $2,000/month property, that's $2,000 you're not collecting. Most owners budget zero.
Maintenance. The rule is 1% of property value per year. On a $300,000 property, that's $3,000 annually whether you spend it this year or not. It averages out. Water heaters don't care about your budget.
Turnover costs. Even a good tenant leaves eventually. You're paying for cleaning, paint, minor repairs, advertising, and lost rent between tenants. Average turnover in Orlando runs $1,500 to $3,000 depending on condition.
Property management if you're using it. Leasing fees if you're not. Your time if you're doing it yourself, and your time is worth something even if you're not counting it.
CapEx. The big stuff. Roof, HVAC, appliances. These don't hit every year, but when they do, they're $5,000 to $15,000. If you're not setting aside money monthly, you're just hoping nothing breaks.
I see owners who think they're making $400/month cash flow, but they're not accounting for any of this. Then the AC dies in July and suddenly they're negative for the year.
You don't have to be a spreadsheet person to run the real numbers. But you do have to count the real costs.
What are you actually clearing after everything?