Rental Property Investor · Chicago and mainly invests in KS remotely · Member since 2018 · 360 posts · 314 votes
How do your capex and maintenance numbers on long term hold rentals compare to your assumptions? Looking to get some clarity on this matter -- a lot of people on BP suggests a percentage method, which I think can be a miscalculation for cheaper and older SFHs because a lot of capex is fixed, but rental income, size of house, vintage of house, type of neighorhood factors into the calculation. That aside, I hope to take an average of other BPer's and compare it to my assumptions to see how much I'm overcharging/undercharging myself. Give me your best inflation adjusted number if possible.
But in general, here are my assumptions when I look for properties:
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y
@Allen L. I am finding that on my buy and holds that I manage, the maintenance costs have been less than the 5% that most BP folks use. In fact, I am finding my costs to be around $30-35 per month per unit on my most stable property. This all goes back to the tenants you have in place though.
CapEx is a different story. I no longer think of CapEx as simply a fixed monthly percentage. Most of the buildings I have been buying are distressed, so I consider CapEx to be an up front cost. In addition, there is a monthly CapEx reserves budget I set after the property is stable. The funny thing is, these reserves can be fairly low because I have fixed everything by the time the property is stable!
I am with John on this. Maintenance is low for me and I rehab everything upfront. Its all built in. I own SFRs. I prefer doing it this way. All the work up front and fewer issues during rental periods.