Operating Expenses

On August 2, 2010, in Investment Property, by David Monsour

Operating expenses are the expenses that the landlord is responsible for paying.  Typical operating expenses are taxes, insurance, water, sewer bills, house electric, gas, etc.  Before I am able to accurately analyze this property I have to know what I’m looking at in terms of expenses. 

I called all of the associated utility companies, and emailed the listing out to a few insurance agents for a price quote.  I calculated the taxes to get my total operating expenses for the property.  The utility companies can only give you average bills over 12 months, but that’s easy enough to figure out the total.  The only obstacle I’m facing is that the building wasn’t at full occupancy.  I need to build in some error to play it safe. 

I will say that if I bought this property I’d have all of the utilites seperated before purchase by the seller, or asap after purchase.  Since we are trying to minimize out of pocket expense we’d ask the seller to do this.  

Electric – $91/mo.  (I suspect this to be low)

Gas – $152/mo (probably also low)

Trash – $600/yr

Taxes – $3816

Insurance – $2100/yr16

Water/Sewer- $1000/yr

A few other expenses that need to be considered.  Maintenance, Accounting, and Advertising. 

We will use this numbers in conjunction with our financing options to paint an accurate picture of this property.  Tomorrow I’ll post an accurate break down of the expenses and projected income.

If you’re looking into investing and Gettysburg, Pa and need some assitance, please don’t hestitate to call.

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