Evaluating Multifamily Property Expenses

[Steven Andrews]

What %s do you use when evaluating multifamily properties? A Bigger Pockets webcast suggestion for single family homes goes something like this:

5% for expenses
5% vacancy
6% capital expenses
10% prop manager

When it comes to multifamily, do you use the same %s? Or do you adjust them. If you do adjust, what %s do you typically use?

Thanks,

Steven

[Nick B.]

Never ever use % for expenses except for PM fee (% of collected rents). Every other expense is a dollar amount that does not depend on the rent.

Vacancy is not an expense.