Investor · Brielle, NJ · Member since 2015 · 121 posts · 21 votes
I was wondering if anyone had input on the percentages to use when evaluating a pro forma for a rental property. Specifically the vacancy rates and maintenance rates I am seeing are 5% each for Orlando and Indianopolis. Does that seem real? Management fees 7-10%. Ive noticed they don't include capex and lease up costs, any guidance about how to include these in monthly cash flow analysis?
I was wondering if anyone had input on the percentages to use when evaluating a pro forma for a rental property. Specifically the vacancy rates and maintenance rates I am seeing are 5% each for Orlando and Indianopolis. Does that seem real? Management fees 7-10%. Ive noticed they don't include capex and lease up costs, any guidance about how to include these in monthly cash flow analysis?
First proforma is the fair market rents as apposed to actual rents - - this effects the GSI. It's fair to use either number, but buyers and lenders usually use the actual GSI.
Vacancy is typically 8-12% and set by the lending institution.
Reserves, Capex or Mantenance is typically 10% as is any property management fees.
Lease up fees? Guess you're attempting to project the costs for move-out, cleanup, application processing and move-in expenses. That's dependent upon your operational expense.
5% is actually close to the current vacancy rate in Orlando, as there is a shortage of inventory. However, I always have my clients budget for 10%; same goes for management expenses at 10%.
Investor · Orlando, FL · Member since 2012 · 822 posts · 303 votes
10y
@David D'Ambrosio lol! I was just agreeing with @Chris Romany about how its better to factor 10% on a fee instead of hoping its 5% and missing your mark.
Investor · Brielle, NJ · Member since 2015 · 121 posts · 21 votes
10y
@Justin Stamper Do you think that using 10% for maintenance is also taking into account long term capex expenses, if you know that they are in good shape currently?