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.
Rather hand it to someone?
I offer two landlord services in Calgary, Airdrie, Chestermere, Cochrane and Okotoks, through KO Realty.
- Full management: screening, rent collection, inspections and the tenancy paperwork, for 8–10% of rent collected.
- Tenant placement only: I find, screen and sign the tenant for 50–75% of one month's rent, once, and you manage from there.
Questions
What percentage of rent goes to expenses on a rental property?
For a Calgary-region residential rental, operating expenses commonly run 35-45% of collected rent before any mortgage payment. Materially below 35% usually means a cost has been omitted, most often turnover, or the owner not costing their own management time.
How much should I budget for maintenance on a rental?
Around 8% of collected rent is a common planning figure for a property in reasonable condition. Older properties, and anything with original mechanical systems, run higher. Budgeting a percentage rather than a fixed amount matters because a single furnace or roof event can exceed several years of routine repairs.
Do I need landlord insurance for a rental in Alberta?
A standard homeowner policy generally does not cover a property that is tenanted. Landlords normally need a rental dwelling policy, and for a condominium a unit-owner policy that accounts for what the corporation covers. Confirm with the insurer that the policy reflects the property being rented, a mismatch is discovered at claim time.
Sources
- City of Calgary: Property tax
- Canada Mortgage and Housing Corporation (CMHC): Rental Market Survey data tables
Figures cited from CREB® and City of Calgary sources reflect the reporting period stated on each page. Rules, fees and programs change. Confirm current details with the issuing authority before acting.
Last updated 2026-09-28 · Written by Mohammad Emon, REALTOR® (SRES®) & Licensed Property Manager, KO Realty · RECA licence CON-00133897