Does not anyone have or know where one can get data on capital expenses over time such as how long a roof will last, a furnace etc.
Also how the capital expenses and R&M budget changes by age of house (in other words a 1920s house will have one level of expenses, a 1950s another, etc.)
I think just using 10% or 12% for all is not the best way to go about it on B class type properties or C and D.
There is no database of lifespans of CapEx from various eras of construction that I know of. A 1910-1940 built home may need new water and sewer lines. Electrical would need replaced if it is the "knob-tub". These are in addition to roof, siding, flooring, furnace, A/C, maintenance... For a newer home (late 90s - early 2000s) the water/sewer lines and electrical system are typically not a concern but always verify.
If you plan on owning a SFR for 35-40 years, you are guaranteed to need to replace a furnace, water heater, all appliances, and the roof at a minimum. I calculate everything conservative. I look at the estimated yearly cash-flow with all the major items replacement costs averaged over how long I think I will keep the rental. If your reserves are tight then count on using credit. Or use a conservative CapEx factor.
In C or D location, know going in that your interior maintenance will be much higher then A or B rentals. Personally I don't invest in C or D for that reason. Quality of tenants have a direct effect on your return in both time and money.
Free eBook from BiggerPockets!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.