I think attempting to fit expenses to the 50% rule is going about it backwards. The 50% rule is just a quick rule of thumb to determine whether a property merits further investigation. If it does, you should figure out plausible estimates for actual expenses and evaluate the property based on those.
It's definitely easy to pick a loser where expenses go far beyond 50% of gross rents. For example, in one market where I own properties, taxes in certain areas of the city may drive overall expenses up to 60-70%, as might water and sewer costs, which are frequently paid by the landlord in this market. However, just down the road, taxes are significantly lower, and you might be able to lower rents somewhat and get a tenant to agree to pay their own water and sewer.
I'll give you some examples of a property I bought early this year, but understand that they only apply to this specific property in this specific market, being run exactly as I run it. The average landlord in this area would collect slightly higher rents, but would be responsible for water and sewer, which drives the percentages up.
Rental Income: $16,800
Property Taxes: $2,152
Insurance: $680
Maintenance and repairs (estimated): $1,562
Property Management: $1,562
Annual re-leasing fees: $700
Lease Renewal Fees: $200
Lawn Care: $280
Vacancy Loss: $1,176
Total Expenses: $8,312
Expenses as a % of Rental Income: 49.48%
Again, these numbers are almost certainly irrelevant to you, as expenses will vary from city to city, block to block, and property to property. You should stop thinking about the 50% rule completely once you start doing an actual analysis on a property. The only exception to this is if your detailed analysis shows expenses way, way under 50%, in which case you have probably forgotten something, or may have been overly optimistic in your analysis.
