Updated over 8 years ago on . Most recent reply
Actual numbers vs. 50% rule
I would like to get members' opinions on this topic. I have read many articles and forum posts about the 50% rule, but always find a large discrepancy between the rule and the actual numbers. I am aware of accounting for property management - 10%, P&I, taxes, insurance, maintenance - 5%, vacancy - 10%, HOA costs, utilities, and CAPEX - 5%. When I do the math on specific properties I find that the actual numbers never add up to near what the 50% rule would suggest for expenses. I frequently read from experienced investors that over the long term they eventually find that expenses end up being 50% after all. So what makes up for the difference that is not being accounted for on the front end in actual numbers?