[quote=temeculaguy]Naw, I’m not buying it, 45% just for repair and vacancies of aprtments. Hope you got a screaming deal on the place if it was in knock down condition. My much smaller sample from my half dozen family owned rentals, runs under 20% and has been under that for 20 years, of which most are sfr’s in three so cal counties. They vary in return, a few have been sold and a few have been recently aquired but none come close to 45% operating, yet all are self managed, so the comparison may be moot. All of which are owned outright so it’s easy to see the operating cost since all of the income is income (unfortunately, they are all part of a trust and I get nothing monthly, hence my desire to build my own empire). If your family is paying 45% of the income in management costs and maintenance, i say you need to hire an auditor, something stinks in denmark.[/quote]
If you’re managing your own property and don’t charge yourself for the time you’re putting into the property… and if you get lucky and have a few good tenants that stay for awhile… I can see how you’re getting under 45%.
Do you do your own repairs?
If you actually calculate all the hours you (or your family) are putting into managing the property including your office supplies/computers etc… that might have dual uses for home and office, then I think you’ll be headed much closer to the 45%
Are you maintaining a cash reserve for large repairs?
My family actually purchased multi-family zoned homes and constructed small apartment complexes on them. That way, while the risk is much higher and the knowledge level needed is much higher, we could still get positive cash flow on properties.
