Variable Landlord-Paid Expenses. What are the typical % used?

Question

When factoring the variable landlord-paid expenses, what percentages of GSI are "typically" used (rule of thumb) for the following:

Vacancy (I've been told conservative is 10% and if deal still works at 10% then you should be okay)

Repairs and Maintenance

CAP EX

Property Management (I know the range is 8-10%)

Thank you

Jaysen Medhurst · Answer

@Jeff Petsche, yes I always go for actuals. Too many variables from town to town on taxes.

Jeff Petsche · Answer

@Jaysen Medhurst Thanks for the information Jaysen. I also assume you factor in the actual property taxes/insurance, or do you use a rough % when first analyzing the deal?

Jaysen Medhurst · Answer

@Jeff Petsche

10% vacancy

8% CapEx

8% Repairs

10% PM

Craig Bellot · Answer

In Bridgeport CT we use 10% for each of these categories although we combine Maintenance and Capex into one category at 10% total.

These are usually for properties recently renovated and built in the 20's to 50's.

We try to outperform these percentages to the delight of our owners.

Sean Carroll · Answer

@Jeff Petsche when I calculate my numbers I always try to go on the conservative side until I truly know with he property. So I do 10% for vacancies until I have a few months worth of rent covered. repairs I factor in 10% until I really know what they are. Property management I account for 10% until I have an agent locked in. then everything is icing on the cake.