Hello BP Network! My wife and I are just starting with our first rental property and wanted to see some opinions on how much we should be saving from rental payments for future expenses? Thank you in advance.

I like to have access to around $8K for a SFH rental. Worst case, I can replace an HVAC and water heater in the same timeframe. You also need to be saving for insurance and tax payments.

@Zach WimberlyA) You personally don't need to set aside a portion of the rental income for future renovations. You just have to make sure that you would have the available funds to make the renovations.So if you have $30,000 sitting in a bank, maybe less likely that you need to set aside money for renovations.However, if you have $0 in the bank, maybe better to set aside some money.How much you should set aside depends on several factors1) How old the house is. The older the house, the more likely renovations will be required in the future2) How good the condition of the house is now. Will a roof need to be replaced in one year or 20 years?

Congrats on your first investment @Zach Wimberly. Many argue that identifying a flat % based on rent can leave too great a margin for error. Here is another alternative, and a good article to read. There are just too many variables specific to your property, and local labor costs vary greatly from market to market. It's a little more work to list out your CapEx expenses over a specified time period, but it may save you a serious headache in the future. How to Estimate Future CapEx Expenses on a Rental Property

We typically set aside 15% of the rent for vacancies and maintenance. It's good you're already thinking about that! Most people don't, and unforeseen repairs are then a huge burden.

Ah gotcha. There's variables to it. Depends on neighborhood class, condition, etc. Per door I see any where from $50-$350+ after expenses. I know this is broad but many things to look at. I'd connect with someone local to establish expectations and see what the area is doing.

Thanks for responding Caleb. Not how much I should expect to net, but how much (Dollar amount or %) should I save specifically for future costs of the property and its requires maintenance?

Like how much you should expect to net after expenses per month?

First Rental Property - Savings? First Rental Property

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