Is 5% too aggressive for a property that is fully turnkey and has a performing tenant? For example, let's say the roof is less than 5 years old. I wouldn't have to save as much since it was recently done? The same goes for repairs and maintenance. If all the appliances are brand new. I could put less money away per month since all the appliances are new. Would 2% or 3% be more reasonable to put in the calculations since all these repairs were made ?

Originally posted by @Samari Robinson :

Is 5% too aggressive for a property that is fully turnkey and has a performing tenant? For example, let's say the roof is less than 5 years old. I wouldn't have to save as much since it was recently done? The same goes for repairs and maintenance. If all the appliances are brand new. I could put less money away per month since all the appliances are new. Would 2% or 3% be more reasonable to put in the calculations since all these repairs were made ?

Your getting to caught up in spreadsheets. It's very important that you understand that in this buisness there are at all times an unlimited amount of variables at play that will change your ROI. Your ROI will go up, go down, stay stagnant for awhile & repeat etc.... You cannot estimated down to the penny how much "cashflow" you will make in a given year. It's just not possible. There will always be an unkown amount.

As for your roof you need to look at it a simpler way. How much does a roof cost? How long does a roof last? When was this roof installed?

Let's assume the roof is $5k & it last for 30 years. If it was replaced in 2017 odds are good you don't need to spend that $5k (or whatever inflation dictates the price will be in 30 years until 2017)

5% probably won't even cover your vacancies, 1 month out of 20, let alone turn over repair costs, let alone general maintenance and capex.....stuff does break, wear out aa

5% probably won't even cover your vacancies, 1 month out of 20, let alone turn over repair costs, let alone general maintenance and capex.....stuff does break, wear out and have to be replaced.  You probably got the cheapest possible appliances, many these days are "throw away" when they break down in A and outlet of years.

I think 5% is very delusional.