What a rental really costs to run
Rent is the easy number. The expense side is where returns are won and lost, and where the line people forget is turnover.
A rental's operating costs are property tax, insurance, condo fees where applicable, maintenance, property management, any landlord-paid utilities, and the amortised cost of turnover, leasing, cleaning, paint and vacancy between tenants. For a Calgary-region residential rental, total operating expenses commonly land between 35% and 45% of collected rent before any mortgage. An expense ratio materially below 35% usually means something has been left out, most often turnover or the owner not costing their own time.
Run the costs
Property tax is estimated from the municipality's approximate all-in residential rate and your stated value. Rates change annually and vary by assessment class, check the actual tax notice before relying on it. Insurance and condo fees are property-specific.
The line everybody forgets
Turnover. When a tenant leaves there is a vacancy gap, a leasing cost, cleaning, usually paint, and often a repair that was tolerable to the outgoing tenant and is not marketable. Spread across an average tenancy it is a real annual cost, and leaving it out is what makes a spreadsheet say a property clears money when the bank account disagrees.
It also explains why chasing the last $75 of rent is often a bad trade. An extra three weeks vacant to achieve it costs more than the year of increase produces, which is the same arithmetic behind not over-correcting a below-market rent in one move.
Self-managing? Cost your own time anyway
Setting management to 0% makes a self-managed property look better than an identical one next door. That is fine for a cash-flow question and misleading for a comparison. If you want to know whether the property is good, cost management at the market rate; if you want to know what lands in your account, set it to zero. They answer different questions.
Want the real numbers instead of the estimates?
Send the address. I will price the property tax, insurance and condo fees from what the property actually is, rather than from a percentage of what you paid for it.
Last updated 2026-08-19 · Written by Mohammad Emon, REALTOR® (SRES®) & Licensed Property Manager, KO Realty · RECA licence LIC-00666633