Rental Property Analysis
Why do some expenses change when rent changes?
Some operating costs are modeled as percentages of income, so when rent changes, those expenses change too.
Answer
Some operating costs are modeled as percentages of income, so when rent changes, those expenses change too.
Examples: Management = Effective Gross Income × management % Maintenance = Effective Gross Income × maintenance % CapEx = Effective Gross Income × capex %
That is why changing rent can affect several lines in the analysis at once.
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