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.
Harvey Cedars, NJ · Member since 2026 · 2 posts · 0 votes
15h
One expense that can be easy to come up short on is turnover. There’s usually some work that needs to happen between tenants. Maybe you need to clean, repaint or take care of a few minor repairs. You may also have some vacancy while you get the unit ready and the next tenant moves in.
I like to look at turnover as an event rather than just one expense. None of those costs may be very high by themselves, but when several of them hit at once, it can get pricey pretty quickly.
@Drew Guarino I agree that turnover can be easy to underestimate. Looking at it as a combination of cleaning, minor repairs, repainting, and vacancy makes sense because those costs can add up quickly. I think including a realistic turnover allowance in the initial analysis can give a more accurate picture of the deal.