HomeOwn & InvestHow Much Does It Cost to Run an Apartment Complex? Real Estate Guide

How Much Does It Cost to Run an Apartment Complex? Real Estate Guide

Apartment complex

One of the oldest and safest investments in the world is real estate. It gives you a consistent cash flow and mostly passive income, making it a popular option for investors. In fact, there are over 8 million independent landlords across the US.

While there are many factors that go into determining the cost of operating an apartment complex, the truth is that you should expect to pay around $500 to $1,000 a year per unit. While this is a general guideline, this is a normal range for maintenance, repairs, and other costs associated with real estate ownership.

However, there are many costs associated with owning commercial real estate. So, how much does it cost to run an apartment complex? Let’s talk about that.

Cost Breakdown

Okay, before we talk about the numbers, let’s do a quick rundown of the costs associated with apartment owners. Remember that every building is different and will have different costs associated with it. You may cover utilities for your tenants, require snow removal services, have electric heat instead of gas.

There are so many factors in every building that will make the costs different, and these will need to be factored into the rent if you’d like to offset the costs. Here’s a landlord guide to routine costs.


Houses are like cars; things break.

You need to consider that in your annual costs and have money set aside for them at all times. A water heater, a furnace, or even a roof can go at any time, so be prepared for those costs to avoid any issues.

If things break, it is on the property owner to fix them in a timely manner if you want to retain tenants and avoid any potential legal issues for serious repairs. Having the knowledge to make common repairs yourself will save you a lot of money, but you will often find yourself having to call in a contractor.

Do your homework on contractors in the area and keep your personal favorite on call at all times. It will save you a lot of money and hassle when you need someone. 

Tenants can also break things, which is why security deposits are important. You should factor in the cost of repainting the interior of a unit every time someone leaves, but there could be more damage. A security deposit can cover buffing a floor and a couple of holes in the drywall, but not major damage. When these costs come up, you should be prepared for them.


This is different from repairs, and apartment complex maintenance needs vary widely. There’s a lot of routine upkeep associated with property management. You may need to keep the lawn mowed, the walkway clear of weeds, and the leaves out of the yard in the fall.

Cleaning the gutters is great for avoiding water damage, and more. Most of this can be done by yourself, but if it’s a big complex, you may need staff or an outsourced maintenance crew to keep up with it all. The average maintenance cost is around $50 to $100 per unit, but this can be reduced if you are doing the work yourself.


These vary widely depending on the apartment complex, and you can add whatever you want as a landlord. Snow removal services could be considered maintenance or amenities, but they are optional. Same with trash services like a dumpster.

You can also offer a pool, recreational room, or plenty of other services, depending on the size and location of your complex. You can easily offset the cost of maintaining these by increasing the rent prices so tenants can share the cost. You will also be able to write these off on your taxes at the end of the year, so keep that offset in mind, as well.

While amenities aren’t entirely necessary, they do help with enticing new tenants and increasing rental income, but only if done correctly!


If you plan to own a gated apartment complex, or one that has a lobby, or one that offers regular cleaning or maintenance services, then you will need some amount of staff. Just like any other type of business operation, employees will be one of your largest expenses.

Full-time staff are far more common in larger apartment complexes but should be factored in, nonetheless. Even if you have a large complex with just 3 full-time staff, those salaries will add up to at least 6 figures, not to mention benefits and liability costs.


The average cost of commercial real estate insurance is $742 a year. This is factored with companies both large and small, so it will depend on the size of your investment. A small owner may pay $500 a year, while a huge commercial real estate company could pay $50,000 a year.

The average deductible for these insurance policies is $1,000, and your maximum payouts could be well over $1 million. Make sure that if you have any specialized coverage needs you to discuss this with your provider before signing any paperwork. Do your research and get the coverage that meets your needs, as there is no one-size fits all policy out there.

Policies will vary widely, so make sure you do your research and get the coverage you need. You never know, any mistake or natural disaster could ruin your entire investment, so a few extra dollars in expenses every month might be worth it down the road.

How Much Does It Cost To Run An Apartment Complex?

An apartment complex in New Jersey is obviously different from the one in Nevada, and even the one directly across the street. Repairs will cost different amounts, markets are different, there is different weather year-round, and there are a lot of other factors to consider. However, we can give a fair estimate of what you should expect to pay. Let’s talk numbers.

Cost Example

Now, if you’re charging rent every month at an average of $1,200 per unit, and you have 10 units, that’s an average cost of $5,000 to $10,000 a year, with a gross income exceeding $144,000. While this sounds too good to be true, you have to remember that there are other costs associated with real estate that go beyond operations. Property taxes and income taxes are not factored into this estimate.

If you wind up paying 30% in total taxes on your remaining $134,000 or more, you could be left with a profit of $93,800, assuming there were no vacancies within the 12-month period. Again, this is with 10 units set at $1,200 a month, so scale these numbers to your circumstances.

How Costs Vary

Remember that the cost of upkeep for each unit will depend on a wide variety of factors. Hardwood floors may be cheaper to maintain than carpets and newer windows will even help lower heating costs! The size of the unit will also play a huge role.

For example, a smaller, studio apartment will have less space to heat, fewer opportunities for needed repairs, and potentially more profitability. The best thing you can do is research a building before you purchase it, ask the previous owner about the net income from prior years, and do the math about the services you’ll be offering.

Before purchasing, don’t forget to have the building thoroughly inspected, set rent prices accordingly, and you should be good to go!

Is Real Estate Worth It?

In short, yes. Real estate is considered a relatively safe investment, and it can last throughout your lifetime with proper care. Even a 2-unit complex with $1,200 a month for rent will (ideally) leave you with $26,800 after the average repairs and before taxes. If you have a job that pays you $50,000 a year, that’s an enormous boost to your income.

Most landlords only work a few hours out of their months, making it fairly passive income. If you have an older building with more need for maintenance and repairs, this could easily be more work. However, it’s a good investment if you’re handy.

You can also hire a property management company for a small portion of the rental income if you want to generate entirely passive income. All in all, it’s a good investment if you make the right choices and keep up with the necessary work.

Get Investing!

So, how much does it cost to run an apartment complex? The answer depends on the individual building, but the average margins are strong enough to consider real estate a safe investment. Stay up to date with our latest apartment news and contact us with any questions!

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