Updated about 8 years ago on . Most recent reply
How do you determine how much to set aside for expenses?
When evaluating properties, I try to use the 10% of rent for maintenance, cap-ex, management, and vacancy. So 40% of rent set aside total to be on the safe side, but this obviously is very generic. Obviously a house built in 1980 in the good part of town will have different expenses then a 1940 house in the C- part of town.
What figures have you found generally work for you and for what kind of houses? Will you only put aside 5% for maintenance, cap-ex, and vacancy for a 1980's house in a good neighborhood. Do you base your it off of a specific cost or do you find percentages of rent or purchase price work best?