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Note that custodian charges such as wages of janitors, <br /> watchmen, doormen, porters, etc. , must always be analyzed to <br /> determine if they are consistent with current wages. <br /> Consideration has to be given to the living quarters <br /> occupied by such employees. The economic rent attributable <br /> to the space should be included in the income estimate. The <br /> costs incurred in providing this space and other <br /> remunerations should be deducted as an expense item. <br /> Fixed expenses include those items which show no or very <br /> little variation from year to year. It is practical to <br /> treat these items individually. <br /> Insurance. As was the case of some other expense items, the <br /> amount reported for insurance in any given year may not be <br /> indicative of the actual annual expense. Many owners obtain <br /> the more economical 3-year coverage plans and expense the <br /> entire premium in one year. Furthermore, many owners obtain <br /> "blanket" coverage for more than one building and fail to <br /> make the proper allocations of cost. It is generally more <br /> effective for the appraiser to establish his own guidelines. <br /> He must be careful to include only items applicable to real <br /> estate. Fire extended coverage and owner's liability are <br /> the main insurance expense items. Separate coverages on <br /> different components for the building, such as elevators and <br /> plate glass, are also legitimate expenses. This factor is <br /> usually built into the building capitalization rate; <br /> however, in some instances, it will be necessary to adjust <br /> the rate to reflect unusual conditions related to specific <br /> properties . <br /> Real Estate Taxes. In making appraisals for tax purposes, <br /> the appraiser will find it more convenient to exclude the <br /> actual amount reported for real estate taxes. Since future <br /> taxes will be based upon his appraised value, he can readily <br /> provide for this expense item by including it in his <br /> capitalization rate. <br /> Other Taxes. Expenses reported in this category, such as <br /> income taxes, corporate taxes and franchise taxes, usually <br /> do not pertain to the real estate and should, therefore, be <br /> disregarded. <br /> Depreciation. The appraiser provides for this expense by <br /> the recapture rate which he includes in his building <br /> capitalization rate. The amount reported for depreciation <br />