Colorado: Where does a dollar of rent go?
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The National Apartment Association has released an updated version of the previous Dollar of Rent analysis, which now provides insights at the state level. This explanatory infographic breaks down a dollar of rent using Colorado state averages into its component parts.
Mortgage Payments: $0.56
A significant portion (56 cents) goes directly to cover the property's mortgage, ensuring the property remains available for residents.
Operating Expenses: $0.26
From utilities to insurance and ongoing maintenance, 26 cents cover the essential operating expenses that keep properties safe, functional and well-maintained.
Employee Payroll: $0.05
Payroll for community staff, from property managers to maintenance teams, collectively accounts for 5 cents of every dollar of rent. Their hard work and dedication are what keeps every community thriving.
Property Taxes: $0.06
6 cents of every dollar of rent goes toward taxes, which finance community programs such as schools, emergency services, parks and other local services.
Capital Expenditures Reserves: $0.02
For future upgrades and significant repairs, owners allocate 2 cents to capital expenditures reserves. By doing this, they are future-proofing their communities and ensuring quality housing for their residents.
Profit: $0.06
There is a common misconception that rental housing providers enjoy large profit margins. In reality, only 6 cents of every dollar are returned as profit to owners. This slim margin underscores the challenging financial pressures that the rental housing industry faces.