I have been reading with great interest the many recent letters decrying the greedy landlords due to the high cost of rent. The latest by Mark Wey, “Give light to tenants’ plight,” prompts me to “give light” to the costs that go into providing rental housing.
I own a rental property in Clark County that I will use as an example of the costs. It is a single-family, four-bedroom home, but the math would scale to any rental. All rentals cost landlords to own and operate. Here’s the details on my property: purchased in 2019 for $540,000, rented for $2,550 a month. Annual costs: $14,200 including $6,000 just for real estate taxes. Add it all up and we have $30,600 in annual rent and $14,200 in expenses. Depreciation will defer some federal tax expense, but I still expect to pay about $1,770 in federal income taxes. My net after tax income is then $14,630. Not bad, except my acquisition cost of $540,000 must be considered. That means my return on investment is a meager 2.7 percent for an investment with a high degree of risk.
The reality is costs are high, which results in high rental prices. Please stop demonizing landlords and an entire industry.
