Expense vs. Rent ratio - anyone know what their portfolio average is? (not a thread about yield)

I just calculated mine, it's sitting at 65%. That means on average, 35% of all my rental income goes to repairs, agency fees etc (excl. interest).

A further breakdown:

• Worse is 57% - my only apartment - due to...you guessed it, body corporate fees...which is funny considering gross yield is a very reasonable 6% (lesson here is be careful about using a gross yield calc, it can be very misleading)

• Best is 73% - a regular run of the mill house that hasn't needed much maintenance in recent years

I'm curious whether anyone else has run their numbers before?

Note that I've disregarded the first few months of any recently purchased properties so that upfront renovation / holding costs don't skew the numbers.

 

Wow those are your figures excluding interest? I'll have to crunch mine, but my expenses are lower than that.

 

Yup. I need to figure out why it's costing me so much. I think the biggest one are my expensive management fees, in QLD they run high at about 8-9% no matter where you go.

 

Whilst I haven't done exact calculations I have given it some thought and figured out it's roughly around 70%.

What's also interesting is the banks use figures around 80%. This would suggest they're overly optimistic. Don't tell APRA (although I suspect APRA is already telling them to adjust this as well).

This is one of the reasons why a 6% yield isn't cash flow positive in most cases.

 

Good point! I should probably delete this thread...

 

House nsw 22%

Expenses (excl interest) / total income

 

House + GF (GF is new build (1.5 years old now), house was gutted and fully renovated)
Total % to Expenses: Council Rates + Water + Agent Fee + Land Tax / Total Rent = 11.38%
(Gross yield, based on purchase price + reno cost + stamp duty = 6.8%

House + GF (GF was new build (6 years old now), total repairs $150 (new oven light) over 5 years. House, bit old, total repairs $10 for a tube of liquid nails.
Total % to Expenses: Council Rates + Water + Agent Fee + Land Tax / Total Rent = 12.45%
(Gross yield, based on purchase price + reno cost + stamp duty = 7.76%

 

As I said this isn't a thread about yield, it's about non-interest expenses...

 

Was following your lead... you put down yield in your first post.

 

yeah I just said that as a "interesting note" sort of thing.

I must have misread your post. I saw positive numbers and misinterpreted them, sorry.

 

72% for a renovated unit in a 70's block in Sydney
68% for a renovated unit in a 70's block in Brisbane

 

I have not finalised 2015, but I have my 2014 figures. Both old houses. Both with cosmetic renos. Self managed.

Melbourne: 34%
Perth: 119%

Melbourne was rented out for the full year, so taking a bath on that one. Perth is a bad example. It was vacant for months while being renovated. Numbers should be better this year.

 

So to answer the question, 70%

 

Interesting ratios.

Mine are 32%, 21%, 26% and 19%. Total for the portfolio is 23%. If I were to self-manage, it would be 17% for the portfolio. So, not a huge difference for the additional headache of managing IPs.

 

Just checked the spreadsheets (channelling @Simon Hampel ) and mine are:

Worst 2+1+1 1970's NSW strata unit 29%
Best 2+1+1 1980's NSW triplex 18%

Working on Sriang calcs

 

BTW, the calc I did was:

(Agents Fees + Body Corporate + Insurance + Gardening + Land Tax + Water Rates + Council Rates + Sundry Expenses) / Rental Income

 

What are the numbers once you've taken the renovation out of the equation? What I'm looking for is the long term average cost of expenses minus the big ticket stuff.

 

Yup that's exactly what I have. Basically everything except major renovation costs, initial holding costs while renovating, and interest. Just your run of the mill "normal" costs.

 

Melbourne is still 34%. It's high.
Perth is hard to tell because I didn't seperate out day to day repairs and maintenance vs repairs and maintenance that I picked up during the reno (excl capital costs of course). Still, at a guess I would say: Perth 23% . I will have a better idea once I lock down this year's figures, so I will post them up when done.

 

Serviced apartments = 50-60% of turnover goes to management, cleaning, mntnce, council, electricity, gas, water, resort management, ASCAP fees.