I am evaluating a $300K house that is about 40 years old. The house is in good condition, AC and roof are 5 years old.
Generally I keep $2000/year towards maintenance when I buy houses that are 5-15 years old in this price range. What is the suggested maintenance for older houses? Any rule of thumb to use while analyzing?
I am evaluating a $300K house that is about 40 years old. The house is in good condition, AC and roof are 5 years old.
Generally I keep $2000/year towards maintenance when I buy houses that are 5-15 years old in this price range. What is the suggested maintenance for older houses? Any rule of thumb to use while analyzing?
Why are you using rules of thumb and not using the results of the thorough inspection by a great inspector that you are surely using and would be an idiot not to base your numbers on?
Real Estate Agent · Worcester county · Member since 2024 · 33 posts · 24 votes
1y
when underwriting a property a good rule of thumb would be to set aside ~5% gross income for each Cap Ex, maintenance, and vacancy. (15% total)
I dont know much of the market in TX but in central MA i work with a lot of investors that are interested in acquiring multi family properties so that's mostly what i deal in.
Sparing the fringe cases, most of these properties are literally over 100 years old and setting aside the 10% i mentioned above for repairs has worked well for clients.
If you are dealing with a property that is 40 years old, that's pretty much a new build in my book haha. You mentioned the roof and AC being new and i'm assuming they're in good condition.
10% should be enough to cover the random water heater that goes or any other lesser headache. Cap Ex expenses will bite you but it sounds like you have two of the big ones already accounted for.