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| This is in regards to the K shaped economy thread below where Fetv and coup got into it about residential rental property.
https://talk.newagtalk.com/forums/thread-view.asp?tid=1228559&mid=11...
I'm not piling on the guy and I don't think he's an evil landlord, but I'm just curious how the numbers work out in these scenarios. I've never dealt in residential real estate so this is all speculation, please correct and inform me.
He said market rents were $600 in 2019 and $1295 today. He uses a management company to rent the units out. I assume they take 10% off the top. I assume a landlord also wants 10% return? He noted the property was financed. Do I guess 50% of the initial gross income goes to debt service?
So in 2019 out of a $600 rent:
Landlord gets $60
Management gets $60
Bank gets $300
Maintenance, repairs, insurance, and taxes $180
in 2026 out of a $1295 rent:
Landlord gets $130
Management gets $130
Bank still gets $300
Maintenance, repairs, insurance, and taxes $735
So from 2019 to 2026 the rent increase 2.2x, the landlord and management company have both doubled their income, the mortgage is steady, therefore the maintenance, repairs, insurance, and taxes have increased 4x in 7 years? | |
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Rental Income Breakdown and K Shaped Economy
