Where % do you use when analyzing turn key properties ?

5 Replies

So when purchasing a turn key property, what % do you use when deciding for

Vacancy

Repair & Maintenance

CapX

Management Fee

I would say it depends on the type of house/tenant that you are looking at. I think 8% across the board is pretty safe. 10% for property management. If you are in a new-er construction house or one with all updated systems, you may be able to get away with lower cap-ex for the first few years. Some of the landlords that I know who buy in rougher areas end up living by the 50% rule. So it really just depends on the area and type of rental. 

(I personally don't divide my expenses out when I am running numbers. I just look at rent-PITI. I have different thresholds on what that gross "cashflow" needs to be based on loan type to make sense for me based off loan type.)

Personally, I probably would not even factor in CapEx if the property is truly turnkey; under the assumption I likely will already be in and out before the big ticket items become due on it

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