I’m trying to get better at analyzing rental deals and I’ve noticed that the obvious expenses like mortgage, taxes, and insurance are usually easy to account for. I’m more curious about the less obvious costs, such as maintenance, vacancy, turnover, property management, or unexpected repairs.
Which expense has surprised you the most after owning a rental property, and how do you account for it when analyzing a deal?
Repairs and maintenance and vacancy are the two biggest surprises for people in general. When people underwrite the deal, they try to be optimistic about it. But the reality is usually different! Again, it's not a big problem if it's a long term hold. Over the time, if you keep fixing things and even upgrade few things, the expense goes away and settles to a lower value.
Real Estate Agent · Phoenix metro, AZ (Surprise · Casa Grande · West Valley) · Member since 2024 · 15 posts · 2 votes
22h
In the Phoenix metro, peak-summer HVAC/utilities and insurance get underestimated more than almost anything else — along with vacancy, turnover, and HOA/CFD where they apply. West Valley vs East Valley vs Casa Grande diverge a lot once those hit the sheet.
I'm a bilingual REALTOR® deep in Surprise, Casa Grande, and the West Valley. Happy to compare neighborhoods for your hold period. card.realsanchez.com