A new survey from RENTCafe shows how $1 of rent breaks down for most owners and landlords. As most multifamily owners can tell you, 90% of each dollar of rent is spent on property operations. These costs include maintenance and improvements, taxes and employee wages. The largest portion of the operations budget, 38 cents, supports the property’s mortgage payments. Many of these expenses have a direct impact on the local economy through taxes ($0.14) and employee salaries ($0.10) as well as capital improvements ($0.12) and maintenance ($0.16). With most of the rent spent on operations, multifamily owners have to keep up occupancy and keep the rent coming in.
Only 10 cents of every dollar is gains for the owner or investor. With such a small cushion, the effects of vacancies have have a devastating impact on the property’s ability to remain in the black. The right leasing team can make a significant impact, even with the eviction moratorium in place. A slim margin makes it critical for multifamily owners and investors to have the right property management, leasing, and maintenance team in place to help control their costs. By hiring the right people, your multifamily investments will grow and add to your bottom line.
The survey was based on data from the COVID-19 Rental Housing Initiative, a new resource for renters and housing providers. The initiative is backed by Yardi, the Institute of Real Estate Management, the National Apartment Association, the National Multifamily Housing Council, and the National Association of Residential Property Managers.
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