Operating Expenses for Multi Family in CA
Hi All,
I am trying to get some back of the envelope, quick calculations for operating expenses for multi family (4-8 units) in LA area.
I've seen the 50% all in operating costs being used for the general multifamily market, but the rents in the rest of the country are much lower, so the % of operating/cap expenses compared to rent is way higher since repair costs don't scale (linearly with rent) just by being in CA. Here is what I am using right now.
Taking $3k per unit at 8 units, here is what I am using as rough estimates. Is this too conservative?
Vacancy: 8% (one month rent)
Property Management: 10%
Repairs: 5% ? (thats $1.2k per month)
Cap ex: 10% ? (thats $2.4k per month in my example)
Tax: 8-10%
Total 43%
I am seeing total expenses, taxes property management at 40-50% of total rent in some threads, so better estimates for LA would be appreciated (for 4-8 units). (https://www.biggerpockets.com/forums/88/topics/134...)