Where Does $1 of Rent Go?

North Carolina: Where Does $1 of Rent Go?

There is a common misconception that rental housing providers enjoy large profit margins. In reality, only 7 cents of every dollar are returned as profit to owners. This slim margin underscores the challenging financial pressures that the rental housing industry faces. 

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 North Carolina state averages into its component parts. 

Mortgage Payments: $0.47

A significant portion (47 cents) goes directly to cover the property's mortgage, ensuring the property remains available for residents.

Operating Expenses: $0.27

From utilities to insurance and ongoing maintenance, 27 cents cover the essential operating expenses that keep properties safe, functional and well-maintained.

Employee Payroll: $0.10

Payroll for community staff, from property managers to maintenance teams, collectively accounts for 10 cents of every dollar of rent. Their hard work and dedication are what keeps every community thriving.

Property Taxes: $0.07

7 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: $0.07

There is a common misconception that rental housing providers enjoy large profit margins. In reality, only 7 cents of every dollar are returned as profit to owners. This slim margin underscores the challenging financial pressures that the rental housing industry faces.