In this analysis, I will be using a real property that I came across. It is a self-storage portfolio in Missouri. They had four properties and an additional property was in a strip mall, so they were leasing it. This property was interesting because it was in one of our target markets.

Some of the expenses for this particular property are: online advertising expenses, bank charges, employee benefits, insurance, here is a line item for the leased property that is on the trip center, payroll expenses, management fees, security expenses, telephone expenses, repair expenses, general and admin, utilities and the most important one, property taxes. Property taxes are the expenses that can kill deals for inexperienced investors. Why? Because the real estate agent is going to put the existing property taxes on their analysis. And typically you are buying the property for a higher price than what the seller bought it for. And so property taxes can double and sometimes triple as it is in this example. And if you don’t realize that until the last minute, or even until after you purchased the property, that can be a huge problem. So in this example, the real estate agent put the existing property taxes, and for a 3 million dollar property, these taxes were $20,000 per year.