I’m curious about how expenses like maintenance, insurance, and large property taxes affect your annual returns on real estate. Do you adjust your figures for these costs?
I always subtract those recurring costs upfront to see my true yield. It feels more realistic to monitor what you really pocket. How do you all track these expense changes over time in your own calculations?
I calculate my yearly returns by first summing up all rental incomes and other cash flows, then subtracting every expense, not only the recurring ones such as management fees and insurance but also variable costs like maintenance and property taxes. I also reserve a margin for unexpected repairs, ensuring that my final yield reflects the actual performance of the investment. This method, revisited at the close of each year, provides a realistic view of profitability and helps refine my investment strategy over time.
i tend to deduct every single cost, even those random fees. i subtract them all from my rental income and then compare the net to my initial outlay to calcualte my yield. this method helps me see if the investment is really worth it.