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General Landlording & Rental Properties

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Gabe G.
  • Greenwood, IN
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estimate assumptions of 50 percent rule

Gabe G.
  • Greenwood, IN
Posted Dec 23 2014, 14:28

I searched for this, but did find any post, that listed specifically percentage breakdowns of the 50 percent rule. I know this is just an estimate, based on some research, that operating expenses for rental property tend to average 50 percent of gross rents over time.

Here is my estimate breakdown, based on rental properties in Indiana. Taxes and Insurance are pretty fixed costs in Indiana, the others are total estimates.

Property Taxes  (11 percent)

Property Insurance (5 percent)

Vacancy   (6 percent)

Maintenance/Repairs   (8 percent)

Capex(Roofs,HVAC etc) (10 percent)

Total Operating Expenses    40 Percent of gross rents without management

Total Operating Expenses with property manager  50 Percent.

I don't use property management currently, but may in the future. While self managing I figure I am running 40 percent operating expenses long term. 50 percent with management.

How would you break down your 50 percent rule in your area?

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