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.

Brannon Potts has watched rents soften in North Texas over the past few years.

“Especially in the last three years, rents have come down a little bit here,” the Fort Worth-area real estate investor told Business Insider.

Potts attributes the decline partly to an influx of new rental supply.

“There’s been multiple hundreds of new properties coming online in the last couple of years, so it’s pushed down rents a little bit, even with the growth in the area,” he said. Still, “my overall profit has gone up.”

Potts, 54, started investing in real estate five years ago as part of a plan to create enough passive income to retire in his 50s. As of mid-2026, he owns 14 units across eight properties, and plans to grow his portfolio to about 20 units.

Rather than buying existing rentals, he uses a build-to-rent strategy and constructs his own properties. He documents the building process on his YouTube channel, where he also breaks down the numbers behind his investments.

Rather than relying on rising rents to improve his per-door profit, Potts has focused on reducing costs. He said his overall operating expenses once represented a little over 30% of his rental revenue, while today, they account for about 26%.

To cut costs and improve his bottom line, he’s focused on three of his biggest expenses: mortgage payments, property taxes, and insurance.

1. He refinanced mortgages when rates gave him an opportunity

Financing is Potts’ largest expense. Over the past year, he said he refinanced several properties when rates dipped, locking the new loans in for 30 years.

“I moved some of those notes from 7.5% — one down to 5.3%, and several of them at 5.9%,” he said.

The lower rates reduced his interest costs and allowed him to increase the amount of principal he was paying down each month. He highlighted this additional benefit on his YouTube channel: “Because that rate went down by 2%, I’m getting an increased return on the capital that I’m using because I’m now paying more principal per month.”

2. He learned to challenge his property-tax assessments

Next, Potts started paying closer attention to property taxes. In Texas, property owners receive an appraised value from their local appraisal district. He initially thought he had to accept that value, but over time, he learned how to file a protest and make a case for a lower valuation.

In 2022, he said property taxes consumed 16.6% of his rental revenue. By 2024, that had declined to about 15%, and today, “my property tax bill represents 11.7% of my revenues.”

He stopped letting the appraisal system simply tell him what his properties were worth and “became proactive,” he said.

3. He raised his insurance deductibles and started shopping around

Potts has also reduced insurance costs, which once accounted for about 6.2% of his rental revenue. He said they now represent about 5.2%.

His first move was raising his deductibles. Because he already had a substantial cash reserve for repairs and vacancies, Potts decided he didn’t want to pay higher premiums to insure against smaller losses he could afford to cover himself.

“I really just wanted to insure for something catastrophic,” he said.

He increased his deductibles from 1% to 5%. A higher deductible generally means the policyholder assumes more of the cost when filing a claim, which can lower the premium. It also means an owner needs enough cash on hand to absorb a larger unexpected expense.

Potts also began shopping his policies more aggressively. Rather than working with an agent who represents only a limited number of insurers, he uses a broker who can compare policies from multiple companies.

Using ‘common sizing’ to find opportunities to cut expenses

Potts has learned that he can’t necessarily count on rising rents to improve his returns. Lowering expenses is another important part of the equation.

One way he identifies cost-cutting opportunities is through “common size analysis,” a technique that converts dollar amounts into percentages relative to a base figure. In Potts’ case, he’s tracking each property’s rental income and expenses, then calculating how much of its revenue is going toward categories such as taxes and insurance.

That makes it easier to spot outliers. If property taxes consume 19% of the revenue from one property but substantially less at another, for example, he investigates why.

“A good operator is looking at revenues, expenses, the financing piece — they’re looking at all of them,” he said. “Common sizing helps to show it.”