Real estate investing is a type of investment that has been gaining so much traction in recent years. While the industry is large, it’s often difficult to know how to manage your finances well even if you’ve made some investments. To help you get started, it helps to know the top 10 real estate metrics every real estate investor should know (and why). So, without further ado, here they are:

1) Closing Costs - Closing costs can make up anywhere from 20% to 40% of your purchase price and vary depending on what state and city you live in. The amount can also be higher if you decide to use a buyer’s agent. According to the most recent report from RealtyTrac, the average amount for the top 50 cities across the United States is 17% of the overall purchase price (with an average closing cost of $5,117). That’s a pretty penny!

2) Mortgage Payments - Your mortgage payment is set up to pay down a little bit of your mortgage every month. If you have an adjustable-rate mortgage (ARM), you might start out paying a lower interest rate but over time, it will adjust higher to match its prime lending rate. This can make it more expensive than a fixed interest rate. You can minimize the risk of having to pay more down the road by choosing a fixed interest rate. You can also get more information about mortgage payments and how to control them by reading my previous article " How To Find A Mortgage That Suits Your Goals ".

3) Monthly Property Tax - Property taxes are a big part of owning real estate. They vary depending on what state and city you’re in but in general, they usually range from a few hundred dollars to a couple of thousand dollars per year. It really depends on where you’re buying. For example, according to Realtor.com, Texas has some of the lowest property taxes across the country whereas Alaska has some of the highest. If you’re looking to purchase some real estate, it would help to know how much you can expect to pay in property taxes.

4) Yearly Insurance Costs - On top of paying rent every month, you will also have to pay for insurance. It can vary depending on what state and city you’re in but it usually costs about $600 or so per year for a homeowner’s policy. This means if your property is worth $200,000 then your insurance will cost around $120 a month. That’s just one more thing you need to consider when buying real estate.

5) Taxes – Real estate taxes can be complicated. Depending on where you live, there might be both a state income tax and local property taxes. How to navigate through these can take time to understand but it’s a crucial part of owning real estate so it’s important to know what they are. Check out my previous article " 5 Biggest Mistakes Real Estate Investors Make " for more information.

6) Utilities - If you rent your home, then expect your utilities to be included in the rent amount. If you own a home, though, you will have your own electric and water bills as well as gas for heating your house. According to the Edison Electric Institute, the average U.S. homeowner pays $986 a year in utility bills. That may sound like a lot but consider that 1/10th of that is $98, and it’s not much compared to what you would pay if you had your own place.

7) Maintenance Costs - As an investor (or landlord), you are responsible for paying for maintenance and repairs in your rental property every month. This can vary depending on several factors including the age of the home, the condition of the property, and even where you live. It can be helpful to have a regular maintenance schedule so that you know when something will need to be fixed.

8) The Interest Rate - As mentioned earlier, your interest rate can make a big difference when it comes to your mortgage payments. The more you pay in interest, the more you end up paying overall. It might sound simple but it’s important to know your interest rate going in so you will not be surprised down the line. You can get a good idea of how much your payments will be by using a mortgage calculator.

9) Tenant Turnover - One of the biggest expenses with owning a rental property is paying for tenant turnover costs. This includes advertising for a new tenant, screening applicants, showing the property, drawing up a new lease, and so forth. In fact, this cost can be anywhere from 1% to 10% of the investment property’s value, depending on where you live. It might be a small investment upfront but consider how much money it could lose you over time for a more accurate picture.

10) Capital Gains & Tax - Capital gains are the profits from the sale of an asset like real estate. Once your capital gains are calculated (amount of profit minus the purchase price), then you have to pay tax on it. According to RealtyTrac (who quotes U.S. Census figures ), in 2013, the median U.S. household income was $51,939 with a net capital gain of $12,150. With the top federal income tax rate at 39.6%, you can see how it adds up over time and can affect your earnings significantly if you decide to sell some real estate later on.

So there you have it—the top 10 real estate metrics every real estate investor should know (and why). Remember that while these figures may seem scary or complicated at first, they are metrics that will help you understand what owning real estate is all about in the long run and make for a smarter investment overall. You don’t need to focus too much on the exact numbers but just know where they’re coming from and how they factor into your real estate investment decisions.

For more information, you can visit Real Estate Calculators.