Ratio between property price and Expenses
Hi All,
I am doing an analysis on a property. The property is worth between $360k-$430k. They want $480k.
I am trying to calculate repair expenses. They are saying that repairs are $1000 a year. I do not believe that the case especially on a property that is almost 90 years old. Anyway! My question is this:
On a property that sells for $430,000 and rents for 45k a year, am I really going to be spending $4500 on repairs/maintenance on a yearly basis? I understand that you never know when a roof or a furnace or other such CapEx will occur. Is this number more for me to make sure I put it aside for that event? Or am I really going to be spending $375 a month on repairs/maintenance?
Considering his $1000 statement (I will need to verify) against my $4,500, it really throws the numbers into whack.