Estimated Costs Lakewood Ohio

[Matthew Jure]

Hi BP community! I am ready to buy a double+ in Lakewood Ohio, but it seems that out of pocket ROI seems low (~5-6%) and I am curious what others are estimating as expenses. The houses are all about 100 years old so I estimate my maintenance costs at 15% of my gross rents (GSI). Also, I don't include mortgage payments in my calculation because I'm paying cash. How are others estimating expenses in the Cleveland area for something similar?

Out of pocket ROI = (all annual expenses + annual capex) / all cash invested

Here's my expense breakdown on a double: 

Maintenance: 15% of GSI

Property Management: 10%

Water/Sewer/Garbage: $150/mo 

Insurance: $65/mo

Capex: 6% of GSI

Taxes: County website

Any insight is appreciated!

[James Wise]

Originally posted by @Matthew Jure:

Hi BP community! I am ready to buy a double+ in Lakewood Ohio, but it seems that out of pocket ROI seems low (~5-6%) and I am curious what others are estimating as expenses. The houses are all about 100 years old so I estimate my maintenance costs at 15% of my gross rents (GSI). Also, I don't include mortgage payments in my calculation because I'm paying cash. How are others estimating expenses in the Cleveland area for something similar?

Out of pocket ROI = (all annual expenses + annual capex) / all cash invested

Here's my expense breakdown on a double: 

Maintenance: 15% of GSI

Property Management: 10%

Water/Sewer/Garbage: $150/mo 

Insurance: $65/mo

Capex: 6% of GSI

Taxes: County website

Any insight is appreciated!

 Instead of using a % of gross rents to calculate capital expenses I think investors would be better suited to just itemize it.

For example.

• A typical Lakewood roof will last 30 years. The cost of a roof is going to be around $5,000
• A furnace is going to last around 40 years. The cost of a new furnace install is going to be around $3,000
• A hot water tank is going to last around 15 years. The cost of a new hot water tank install is going to be around $1,000

How old the above 3 items are on the prospective property is going to determine how much life they have left and how much you should account for in cap ex savings.