Rent is the only line on a rental that pays you. Everything under it takes something back, and the two lines that swing hardest from one building to the next are the two a calculator usually starts at zero.
The default house in the buy and hold calculator is a $250,000 single-family rental renting for $2,750 a month, bought with 20% down on a 30-year loan at 7%. It keeps $420 a month. That answer assumes the tenant pays every utility bill and the house has no homeowners association.
Which expense lines does a calculator leave blank?
Utilities and HOA dues. Both are blank on the default house because a single-family rental often has neither. Put a real figure in each and the same house looks different. The example below uses $150 a month of utilities, which is what a landlord-paid water, sewer and trash account can run, and $200 a month of HOA dues. Both are the example’s assumptions, not quotes.
| Monthly | |
|---|---|
| Cash flow with utilities and HOA at zero | +$420 |
| Utilities, if the bills are yours | −$150 |
| HOA dues | −$200 |
| What’s left | +$70 |
These are example figures, not a forecast for any market.
That is an 83% cut to the monthly cash flow, and the rent, the price and the loan never moved. The cash-on-cash return goes from 8.8% to 1.5%, and debt coverage falls from 1.32 to 1.05, which is close enough to 1.00 that a lender may balk.
What are all the running costs on a rental?
Eight lines, and the calculator has a box for each. Six of them apply to nearly every house.
| Expense | How it is set | On this house | |
|---|---|---|---|
| Property tax | A yearly bill from the county, reset at your purchase price | $250 a month | |
| Insurance | A yearly landlord policy quote | $117 a month | |
| Vacancy | A share of rent, for the months nobody is paying | 5%, or $138 | |
| Maintenance | A share of rent, for repairs as they come | 5%, or $138 | |
| CapEx reserve | A share of rent, saved for a roof, furnace or water heater | 5%, or $138 | |
| Property management | A share of the rent actually collected | 8%, or $220 | |
| Utilities | A monthly figure, if any bill is in your name | $0 by default | |
| HOA | A monthly figure, if the building or subdivision charges one | $0 by default |
The mortgage sits outside that list. It is a cost, but it is not an operating cost, which matters when you work out a cap rate: that measure uses the costs above and ignores the loan.
What do utilities and HOA dues take on their own?
Separately, less than you would guess from the pair. Utilities at $150 leave $270 a month. HOA dues at $200 leave $220. Together they leave $70, because neither scales with anything. They are flat charges against a fixed amount of rent, so each one eats a straight share of the margin.
HOA dues sometimes buy back part of their cost. If the dues cover water, lawn care and exterior upkeep, the utilities line and part of the maintenance line should come down. Read what the dues include before you enter both at full price. What they rarely cover is the inside of the unit, which is where most tenant repairs happen.
Which costs rise with rent, and which stay flat?
Three of the eight are set as a share of rent: vacancy, maintenance and the reserve for big repairs. Management is a share of the rent collected. Raise the rent and all four rise with it, which is why a rent increase never reaches your pocket in full.
Property tax, insurance, utilities and HOA dues do not care what you charge. They are the lines that make two houses at the same price and rent pay differently.
The share-of-rent method is a budgeting shortcut, not a bill. A 25-year-old roof does not cost 5% of rent a month; it costs nothing for years and then costs $12,000. The repair and replacement budget post works through how much to hold back and why the reserve is separate from maintenance.
Does a property manager change the answer much?
Two percentage points of management cost this house $55 a month. At the default 8%, management takes $220 and the house keeps $420. At 10% it takes $275 and the house keeps $365, a 7.6% return on cash instead of 8.8%.
That is a smaller swing than the two blank lines, and it buys back time rather than money. Fees vary by market and by what the fee includes, and the property manager fee post covers leasing fees and renewal fees, which sit outside the monthly percentage.
If you plan to manage the house yourself, leaving the box at 0% overstates what the deal pays. The work is real even when the fee is not, and you will want the figure if you ever hand the house over.
What does the IRS treat as a rental expense?
A longer list than the calculator’s, because it includes costs that are not monthly. Publication 527, the IRS guide for residential rental property, introduces its list with “Listed below are the most common rental expenses” and names advertising, auto and travel, cleaning and maintenance, commissions, depreciation, insurance, interest, legal and professional fees, local transportation, management fees, mortgage interest, points, rental payments, repairs, taxes and utilities (Publication 527, for use in preparing 2025 returns).
Two lines in that list are worth separating from your monthly budget. The publication says “You must capitalize any expense you pay to improve your rental property,” and counts an expense as an improvement when it betters, restores or adapts the property. So a new roof is not a repair for tax purposes even though your reserve paid for it. What you can deduct, and when, is a question for a tax professional who has your return in front of them.
What to check before you trust a cash-flow figure
Pull three figures off the listing and two off a quote. From the listing: the HOA dues, the current tax bill, and which utilities are in the landlord’s name. From a quote: the landlord insurance premium and the lender’s payment.
Then open the four share-of-rent boxes and decide whether 5% each is right for a house of that age. The analysis mistakes post names the ones that cost the most, and the cash flow post runs the full calculation line by line if you want to see where each figure lands.