DIFFERENT TYPES OF OUTGOINGS REQUIRED TO MAINTAIN THE REVENUE OF THE BUILDING

Outgoings.- Outgoings or the expenses which are required to be incurred to maintain the revenue of the building. The various types of outgoing are as follows:-

1. – These include Municipal Tax, Property Tax, Wealth Tax, etc., which are to be paid by the owner of the property annually. These taxes are fixed on the basis of the ‘Annual Rental value’ of the property after deduction for annual repairs, etc.
2. Repairs.- The repairs are required to be carried out every year to maintain a property in fit condition. The amount to be spent on repairs depends upon the age, construction nature of the building, etc., and usually, 10 to 15 percent of the gross income or gross rent 10 to 1 ½ month’s rent is allowed for repairs. For annual repairs, 1% to 1 ½% of the total cost of construction may also be taken.
3. Management and Collection charges.- These include the expenses on Rent Collector, Chaukidar, (watchman) Lift man, Pump attendant, Sweeper, etc. About 5 to 10 percent of the gross rent may be taken on this account. For a small building, none of these may be required and there will be no outgoings on this account.
4. Sinking Fund.- A certain amount of the gross rent is set aside annually as a sinking fund to accumulate the total cost of construction when the life of the building is over. This annual Sinking fund is also taken as outgoings.
5. Loss of rent.- The property may not be kept fully occupied in such case a suitable amount should be deducted from the gross rent under outgoings.
6. – These include electric charges for running lift, pump, for lighting common places, and similar other charges which are to be borne by the owner.

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