The assumed rental units are based on one I own. Bought 4 years ago for $150,000, it would now sell for $200,000. Rent on the unit now is $1,600 monthly. Condo maintenance fees and property taxes on the unit are $6,250 yearly. Repairs and vacancies for the unit are conservatively estimated at $1,000 yearly and at one month every 3 years*, respectively. Resulting monthly net income per unit (with no mortgage) is $950. On an annual basis, the income is $11,400, which is 5.7% of the $200,000 investment. ## CONDOMINIUM APARTMENT INCOME AND EXPENSES

by Ernesto R. Martin

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* The $1,000 yearly in repairs is based on my experience with this building but falls nicely in a simple formula I use to estimate yearly repairs when I look to buy other apartments; the formula is $100 + 20Y, where Y is the number of years since the building was built. So the yearly repair estimate is $400 for a condo in a 15 year old building, $700 if it's 30 years old. While this takes building age into account, it should be adjusted up or down based on theof the apartment.conditionWhile this repair estimate may be conservative, the vacancy estimate of one month every 3 years may not be, when you consider a Realtor's commission to re-rent the unit between tenants. This commission is typically equal to one month of rent, so my estimate just pays for that and not for the loss of income if the apartment is vacant for a month between tenants. I have chosen, however, to continue using the "one month every 3 years" formula for 2 reasons. First, I've been able in many instances to re-rent the unit by advertising it on CraigsList rather than using a Realtor, especially for units in the $250K-350K price range I prefer (more expensive, luxury units, aside from having lower net income, almost always require listing with a Realtor). Second, I often re-rent with no vacancy, or minimal vacancy like a couple of days, because I generally have 60 days of advance notice of a tenant leaving, so the new tenant can move in immediately after the old tenant moves out.