Financial Advisor · FL · Member since 2019 · 19 posts · 1 vote
We are under contract to purchase 40 duplexes in Florida, 100% rented, class A and some B with long term tenants. The 40 buildings are in good shape with 60% of AC units being less than 5 years old and 90% of the roofs are in perfect condition. Year build range from 2007 to 2017. I am stuck on what % to account for repairs, vacancies and management cost.
I want a management company that cares about my expenses and pays all debts, mortgage payments, taxes and utilities. Does anyone have at least 2 to 3 years of experience on something like this? I am mainly concerned about what to account for repairs NOT capital improvements as they will come out of a separate account and will be added to the basis cost for depreciation.
Get some pricing from the property management companies on those items. Have a conversation with 3-5 property managers to discuss not only their fees, but the typical cost of maintenance, unit turnover expenses and vacancies. When talking with property managers ask them about ALL the fees that they charge, including admin fees, move in fees, re-leasing fees, etc.
General rule for repair and maintenance is 10-15% of the gross income. You have newer properties, however, so I would expect you to be on the lower end.
For vacancy, ask about todays vacancy rates, historical vacancy rates and what their vacancy was in 2009-2011