An investor using real estate to retire early says his rents fell in 2026, but he still increased his profit by focusing on 3 expenses.

Aug 19, 2026 04:30 PM - 2 hours ago 1

Brannon Potts has watched rents soften successful North Texas complete the past fewer years.

"Especially successful the past 3 years, rents person travel down a small spot here," the Fort Worth-area existent property investor told Business Insider.

Potts attributes the diminution partially to an influx of caller rental supply.

"There's been aggregate hundreds of caller properties coming online successful the past mates of years, truthful it's pushed down rents a small bit, moreover pinch the maturation successful the area," he said. Still, "my wide profit has gone up."

Potts, 54, started investing successful existent property 5 years ago arsenic portion of a scheme to create capable passive income to discontinue successful his 50s. As of mid-2026, he owns 14 units crossed 8 properties, and plans to turn his portfolio to astir 20 units.

Rather than buying existing rentals, he uses a build-to-rent strategy and constructs his ain properties. He documents the building process connected his YouTube channel, wherever he besides breaks down the numbers down his investments.

Rather than relying connected rising rents to amended his per-door profit, Potts has focused connected reducing costs. He said his wide operating expenses erstwhile represented a small complete 30% of his rental revenue, while today, they relationship for astir 26%.

To trim costs and amended his bottommost line, he's focused connected 3 of his biggest expenses: owe payments, spot taxes, and insurance.

1. He refinanced mortgages erstwhile rates gave him an opportunity

Financing is Potts' largest expense. Over the past year, he said he refinanced respective properties erstwhile rates dipped, locking the caller loans successful for 30 years.

"I moved immoderate of those notes from 7.5% — 1 down to 5.3%, and respective of them astatine 5.9%," he said.

The little rates reduced his liking costs and allowed him to summation the magnitude of main he was paying down each month. He highlighted this further use connected his YouTube channel: "Because that complaint went down by 2%, I'm getting an accrued return connected the superior that I'm utilizing because I'm now paying much main per month."

2. He learned to situation his property-tax assessments

Next, Potts started paying person attraction to spot taxes. In Texas, spot owners person an appraised worth from their section appraisal district. He initially thought he had to judge that value, but complete time, he learned really to record a protestation and make a lawsuit for a little valuation.

In 2022, he said spot taxes consumed 16.6% of his rental revenue. By 2024, that had declined to astir 15%, and today, "my spot taxation measure represents 11.7% of my revenues."

He stopped letting the appraisal strategy simply show him what his properties were worthy and "became proactive," he said.

3. He raised his security deductibles and started shopping around

Potts has besides reduced security costs, which erstwhile accounted for astir 6.2% of his rental revenue. He said they now correspond astir 5.2%.

His first move was raising his deductibles. Because he already had a important rate reserve for repairs and vacancies, Potts decided he didn't want to salary higher premiums to insure against smaller losses he could spend to screen himself.

"I really conscionable wanted to insure for thing catastrophic," he said.

He accrued his deductibles from 1% to 5%. A higher deductible mostly intends the policyholder assumes much of the costs erstwhile filing a claim, which tin little the premium. It besides intends an proprietor needs capable rate connected manus to sorb a larger unexpected expense.

Potts besides began shopping his policies much aggressively. Rather than moving pinch an supplier who represents only a constricted number of insurers, he uses a agent who tin comparison policies from aggregate companies.

Using 'common sizing' to find opportunities to trim expenses

Potts has learned that he can't needfully count connected rising rents to amended his returns. Lowering expenses is different important portion of the equation.

One measurement he identifies cost-cutting opportunities is done "common size analysis," a method that converts dollar amounts into percentages comparative to a guidelines figure. In Potts' case, he's search each property's rental income and expenses, past calculating really overmuch of its gross is going toward categories specified arsenic taxes and insurance.

That makes it easier to spot outliers. If spot taxes devour 19% of the gross from 1 spot but substantially little astatine another, for example, he investigates why.

"A bully usability is looking astatine revenues, expenses, the financing portion — they're looking astatine each of them," he said. "Common sizing helps to show it."

Kathleen is simply a analogous astatine Business Insider, covering investing and the way to financial freedom. She's been penning astir individual finance for BI and different publications, including CNBC, since 2015.Her sum includes the Financial Independence, Retire Early (FIRE) movement, existent property investing, and broadside hustles. She besides occasionally covers mini businesses and enjoys penning individual narratives astir her ain experiences navigating the world of money.Elkins graduated from Williams College successful 2014 and resides successful Los Angeles. Outside work, she trains for marathons and triathlons successful the Santa Monica Mountains.Follow her on LinkedIn.Popular articles:

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