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General Landlording & Rental Properties

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Matthew Mucker
  • Ft. Worth, TX
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Where does the 50% rule come from?

Matthew Mucker
  • Ft. Worth, TX
Posted Aug 3 2008, 10:47

I know the "50% rule" is bandied about as gospel here in the forums, but haven't seen any actual, hard data that says that operating expenses tend to be ~50% of gross rent income. I'd like to verify this number is, in fact, accurate. (I believe that it probably is; but I owe it to myself to verify my assumptions, right?)

It would not only help me ensure that I'm using realistic numbers, I also think that it would be good data (ammunition?) to have when negotiating.

Can anyone provide links to studies that address operating expenses as a percentage of gross rent income? The little searching I've done hasn't yielded anything.

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