Posted by Redline on March 12, 1999 at 14:01:15:
I’ve seen it said that your expenses on these ‘larger’ buildings are going to run %40-50 of gross. In any event, you should figure in this much.
RL
Net operating income question - Posted by Mike
Posted by Mike on March 12, 1999 at 12:24:24:
Hi.
Can anyone tell me what the typical categories of expenses are calculated into the monthly operating expenses of a multiunit bldg. (i.e. 10% vacancy, 5% maintenance, etc.)
I’m trying to understand a good rule of thumb to use when analyzing multi’s. Obviously, due diligence is required to verify the numbers, but we need to start somewhere.
Thanks.
Mike
Re: Net operating income question - Posted by Mike (KCMO)
Posted by Mike (KCMO) on March 12, 1999 at 13:11:26:
Mike,
In addition to your vacancy and credit loss rates, don’t forget accounting/legal expenses, management, janitorial, lawn care & snow removal, trash service, supplies, maintenance allowance, advertising and utilities. Unless the building is fairly new, I’d question any expense report that was less than 30% of your gross rents. Just remember to verify everything!
Mike
Re: Net operating income question - Posted by Jim
Posted by Jim on March 12, 1999 at 12:27:57:
In the Boston, MA area. I use 5% vacancy and 1 month gross rents for maintenance.