What to do with Capex savings?

Question

My brother and I inherited 2 rental properties that are fully paid off. They bring in around $1850 in gross rents. They're not new houses so I've been budgeting for capex stuff, but I'm not sure how to handle the money for capex.

Do you just keep it piling up in a savings account for the day you need it? Should I constantly be fixing things on the property in preventative maintenance to keep it from piling up?

New to all this stuff, so very sorry if this is a simple question.

Roger S. · Answer

I do all my own repairs and maintenance, so my budget is probably lower than yours, especially with you in San Fran.    Your 20k bathroom would buy almost half of one of my houses.  Almost all my homes cost 60k or less.  My biggest concerns are central heat and air replacements.    I have 10 homes, but 2 of them have window units, so that's a break and 2 more have almost new units.

I don't worry about roofs, about every 10-15 years we get a hailstorm and the roofs get replaced anyways.  Last time I had storm damage to 2 roofs, I made 500 bucks.   Push comes to shove and I could reroof and 800 square foot house myself over a long weekend.   I don't worry about the people who say I should include the cost of having someone else manage my properties.   To me, my properties are my ticket out of a job I don't like, so my efforts there are a reward, not a liability.

I'm comfortable with my mins and maxes and my yearly set aside is 10k.

Roger S. · Answer

At the moment I'm just using my best seat of the pants guess.

Ryan Esaki · Answer

@Roger Sandmann thank you very much for your response! How do you find the min / max range?

Roger S. · Answer

I set a minimum and maximum for my Capex account.   I have a set amount that goes in each month.   Once it reaches my maximum, I feel free to use the excess for other things.