Anonymous asked in Business & FinanceRenting & Real Estate · 1 month ago

How much profit should I expect on a paid-off 3-bed townhouse, $950/yr tax, $450/yr insurance, that Zillow estimate rental at $1500 a month ?

6 Answers

  • 1 month ago

    gee ... I would guestimate (1500 * 12) - 950 - 450; but idk of any other debts or problems. {Depreciation would also up your annual income but reduce the profit when you sell. I also do not know your personal tax rate.}

    Source(s): my crystal ball is broken
  • 1 month ago

    Once you get a tenant on a year's lease, deduct from $18,000 gross rent:

    property taxes

    HOA fees (if any)


    income taxes (state & federal)



    legal expenses (e.g. getting a lease drawn up, handing legal problems such as evictions as needed)

    fees for credit & background checks on prospective tenants

    accounting costs - you may need help with accounting, and/or income tax prep

    You need to calculate depreciation on income properties.

    Set aside reserves for major maintenance, replacement of appliances, water heater, furnace/HVAC, new roof, exterior maintenance, painting, replacing carpet, plumbing repairs, replace fencing around the yard, refinishing decks, etc. You will have clean-up expenses when a tenant moves out, including replacing carpet or professional steam cleaning, or refinishing hardwood floors. Window blinds often need replacing, certainly cleaning (blinds are a pain in the butt to clean, maintain!). Every system, every appliance, every working part in a vehicle, home, aircraft or anything else has a useful life! You must have reserves for repair & replacement of everything in & on the property.

  • DEBS
    Lv 7
    1 month ago

    $16,600 is your positive cash flow annually assuming it's rented every month of the year and you have no maintenance. That's not profit though as you have other longer term expenses you'll need to be prepared for.

    Who is taking care of the yard? Is that your expense? That's probably $100/month out of your pocket if so. Repairs for leaking pipes. New roof. Who knows what else. They won't be every year, but they will occur. Depending on your market, you should anticipate turnover of tenants. That means lost rent for likely a month plus the need to do other maintenance such as painting or putting in new carpet.

    Given you sound completely new to this, you may want to hire a tax professional and/or lawyer to have your business set up properly. Then annually you'd want to make sure your taxes are appropriately done. Not a major expense, but one more to add to your list (and one which makes sure you're not paying more personally or as a business in taxes while also protecting yourself from liability standpoint.)

  • Judy
    Lv 7
    1 month ago

    depends on what other expenses, like maintenance and repairs, you have, and whether it's rented all year.......

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  • Anonymous
    1 month ago

    Cash flow would be +16,600 a year fully rented. (1500x12=18000 minus 950 and 450)

    Profit involves depreciation & stuff and its complicated but it would be less for tax purposes.

    Assuming no maintenance or repairs. And assuming you rent at $1500.

    Your rental agreement should say renter pays for all maintenance under $300.

  • Dze
    Lv 7
    1 month ago

    thats depends entirely on the market in your area .. if you bought low and growth is booming in the area expect alot .. if you bought high and local factories are shutting down and it turned into a ghetto, probably none ..

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