2023 : Breaking Down $ 1 of Rent in Colorado
With so much discussion around rent payments and the prevailing misconception that rental housing owners enjoy large margins , the industry would like to offer this explanation of the breakdown of $ 1 of rent based on the state average .
Only 6 cents of every $ 1 is returned to owners as profit , including the many apartment owners who are themselves small businesses and rely on this revenue to make ends meet , and investors , which include public pensions and retirement plans , on which many Americans rely whether or not they reside in rental housing .
2 cents of every $ 1 goes toward capital expenditure reserves . The funds in these reserves cover roof and HVAC replacements and other important repairs that help ensure quality housing for Colorado ’ s 733,600 rental housing residents .
56 cents of every $ 1 pays for the mortgage on the property . This is a critical expense , as mortgage foreclosures put all residents at risk of losing their housing .
6 cents of every $ 1 goes to property taxes , which in turn support the community through financing for schools , teachers , emergency services and other important local needs .
26 cents of every $ 1 pays for operating expenses such as property and liability insurance , utilities and ongoing maintenance .
5 cents of every $ 1 covers payroll expenses , including pay for employees who operate and maintain the community as part of the 310,400 jobs that the industry supports .
Between mortgage payments , investor returns — which help support many Americans ’ retirement plans — and dollars put back into the apartment community to ensure quality living for residents , a rent payment is much more important than one might otherwise realize .
Sources : National Apartment Association , Thirty Capital Performance Group , weareapartments . org
54 | TRENDS NOV / DEC 2023 www . aamdhq . org