MF/apartment owners: How do you track upcoming CapEx from your Prop Managers?

Question

How do you currently track upcoming CapEx across properties managed by a third party?

Managing a few B and C class apartment buildings in the Midwest and Sunbelt through a PMC. I get monthly reports but by the time I hear about an HVAC or roof issue it's usually already a problem.

Curious how other owners handle this. Do you get any kind of forward-looking signal from your property manager or is it always reactive?

Brandon Vukelich · Answer

Send me a DM and I can share a PDF that references many life cycles for property components.

You'll know by looking and knowing the avg life expectancy of most items. I know a roof should be good 20-25 years, water heaters in my areas last 15 years or so, furnaces should be serviced every year and last 15+ years, etc.

Patrick Imperato · Answer

Love this @Brandon Vukelich, thanks for the insight!Any tool, outside spreadsheets and PM PDFs/images, to monitor this or compare with how long they should last?Ex: the sealing in the parking lot wears faster, so maybe you need to go before 2027. Or a better wear and tear analysis of which roof should go first, and how you make the decision to repair vs replace it?This so many things to monitor, how do I know when to push the PM to repair something vs replace it, how do I know?Appreciate it!

Brandon Vukelich · Answer

@Patrick Imperato I own B and C properties in another state. I make an effort to travel there at least once a year or worst case, every other year. I walk the property and EVERY unit with a rep from my PM office. I'm specifically looking at the landscaping, siding, roofs, HVAC (if applicable), water heaters, parking lot, etc. I make a list of items, take pictures and then keep an updated priority list and estimate budget needed (i.e. sealing/striping the parking lot $5k 2027). All info is kept in a spreadsheet on my end and my PM is good about sending quarterly exterior inspection reports. I try to stay on top of deferred maintenance and capex as much as possible so I can fund in smaller chunks vs huge cash outflows at once. For example, my 18-unit property is five buildings = five roofs. When the time comes, my plan is a roof a year for 5 years straight. The property cash flows and builds up reserves so I rarely need to send additional (personal) funds to subsidize projects. I try to keep $30k+ in reserves for that property alone.

Either way, a good PM should be sending you updates, pics or exterior inspection reports every quarter or at least every 6 months. They should also be making suggestions or recommendations to maintain your asset or make it more attractive to residents. If not, maybe time to shop for a better PM partner. Hope that helps a bit.