building expenses to consider?
When buying a five family with a three apts to rent, what is the full range of expenses to consider? Obviously RE taxes, water/sewer, heat/hot water (gas?), insurance, common area electricity… anything else? Even little things? I’m trying to put together a full report and want to make sure there is nothing left unaccounted for……
When buying a five family with a three apts to rent, what is the full range of expenses to consider? Obviously RE taxes, water/sewer, heat/hot water (gas?), insurance, common area electricity… anything else? Even little things? I’m trying to put together a full report and want to make sure there is nothing left unaccounted for… I would love to hear from building owners since they know about all those little things that might come up. Thanks!
Exterminator fees
Gardener for backyard/frontyard
Garbage collection/removal
Yearly/semi-annual sewer main cleaning
Lock repairs -very common
Indoor carpet/hallway cleaning- required biweekly
Advertising for vacancies
Painting/clean-up for vacant apartments
Lightbulbs for common areas
The above if pretty inclusive but having maintained the checkbook for a small co-op for the past couple of years, I have a couple more.
Unless you wish to do these items yourself: Service or startup of AC and boiler, ac filters if applicable, hallway cleaning and supplie/garbage to street, yards and sidewalk cleaning, tree pruning, gutter cleaning. Sprinkler inspection (if applicable), extermination. Then minor office supplies like stamps and envelopes, perhaps bank fees.
BklynBorn got the bulk of them…
…. in general figure 6 months cash reserve on hand is a good metric to work with. You never know when a pipe will burst causing $10k worth of damage or the “roof repairs” will suddenly turn in to a new $15k roof with additional work on the apartment below….
It’s not to say that the minute you buy a building things will go wrong (your inspection will give you an idea of immediate vs long term expenditures) but it’s good to keep in mind things that could happen.
Other day to day stuff such as light bulbs for the common areas, rock salt and shovels for the winter, making keys, etc etc etc
Painting apartments
Apartment repairs such as plumbing, electricity, etc
Garbage bags, roof repairs, capital expenses such as a new boiler
yearly boiler inspections ($75)
Building registration fee (13)
taxes owed by you on the rental income (if you are filing Schedule E)-If you own the building as an S-Corp, you will have to file a federal state and city return for the building
Legal fees for non-paying tenants
And the list can go on.