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Each month Sally collects the rent from her 4 roommates, totaling $2400. She keeps her $500, and deposits the rest into a bank account dedicated for the property. Industry and taxes get paid each month from that same account. Together, these cost $1100 ($900 for industry and $200 for the taxes). That leaves an end-of-the month profit of $800 house for rent in tay ho your property. Cash just sits in the account in the eventuality of emergencies, repairs, or other unforeseen expenditures.

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In our last article, we did a comparison of operating expenses vs. capital expenses. You have got a good understanding of the items these expenses are, where we record them exactly why we record them when-and just the amount it matters!

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